ALBANY, Ga. — If Lee Mullins lived in Pittsburgh, he could buy mid-level health coverage for his family for $940 a month. If he lived in Beverly Hills, Calif., he would pay $1,405.
But Mullins, who builds custom swimming pools, lives in southwest Georgia. Here, a similar health plan for his family of four costs $2,654 a month.
This largely agrarian pocket of Georgia, where peanuts and pecans are major crops and hunters bag alligators up to 10 feet long, is one of the most expensive places in the nation to buy health insurance through the new online marketplaces created by the federal health law. The only place with higher premiums are the Colorado mountain resort areas around Aspen and Vail, a high-cost-of-living area unlike Georgia.
"We're not real happy with the way things are going in our neck of the woods," said David Hardin, Mullins' insurance broker.
All the dynamics that drive up health costs have coalesced here in southwestern Georgia, pushing up premiums. Expensive chronic conditions such as obesity and cancer are common among the quarter-million people in this region. One hospital system dominates the area, leaving little competition. Only one insurer is offering policies in the online marketplace, and many physicians are not participating, limiting consumer choice.
Until these elements are brought under control, it will be challenging for the Affordable Care Act to fully live up to its name, not just here but in other parts of the country where premiums are high. Other expensive places include rural Nevada, parts of Wisconsin, most of Wyoming, southeastern Mississippi, southwestern Connecticut and Alaska.
In these places, government subsidies are shielding people with low and moderate incomes from the full cost of the premiums. Randy Gray, a flower shop owner in Albany, is paying just $32 a month, with taxpayers picking up the remaining $805.
But for those earning too much to qualify for federal financial help, the premiums can be overwhelming. A 60-year-old making $47,000 in Albany would have to pay a quarter of her income for the least expensive mid-level "silver" policy, the level most consumers are buying.
Even some people who qualify for federal assistance, such as Stacie Brown, owner of a pottery shop, are balking. The cheapest "bronze" plan for Brown, her husband and son would cost the family $300 a month but not begin paying medical bills until they exceeded the $6,300 individual deductible. The cheapest silver plan would cost $508 a month but not start paying until a $3,000 individual deductible was met. Her son's pediatrician was not in any of the networks, and that was the one medical service she felt sure her family would use.
Brown ultimately bought a $256-a-month Assurant Health plan for her son — sold outside the marketplace — that covers his pediatrician and unlimited office visits. She and her husband have decided to forgo coverage for themselves, even though they may face a tax penalty of $700.
"I can't afford the affordable health care," she said. "I don't know anyone in this area who can afford it, and I do pretty well in life."
All the ingredients for heavy health-care needs — both medical and socioeconomic — are common in southwestern Georgia's 12 counties, which are being treated as a distinct region in the insurance market. One in four children lives in poverty, and one out of every three people here is obese. Babies are more likely than those in most parts of the country to have low birth weights, according to data compiled by the University of Wisconsin Population Health Institute.
The lowest premiums in the country are around Minneapolis, known for its healthy population. Yet other parts of the country face the same kinds of health challenges as southern Georgia and have significantly lower insurance premiums. In a cluster of five South Carolina counties that the University of Wisconsin data show have demographics similar to those in southwestern Georgia, the lowest-priced silver plan is 39 percent less expensive.
Many insurance brokers and residents place the blame for high premiums on the expanding Phoebe Putney Health System, the nonprofit group that runs six hospitals in southwestern Georgia. The Federal Trade Commission and Georgia's attorney general unsuccessfully tried to reverse Phoebe's 2012 acquisition of Palmyra Park Hospital in Albany because it made the system so dominant that they said Phoebe could essentially dictate prices. In a settlement, Phoebe was allowed to hold on to Palmyra, giving it 86 percent of the regional health-care market.
It's challenging to assess hospitals' prices here because, as in most places, contracts between insurers and hospitals are kept private. Morgan Kendrick, president of Blue Cross and Blue Shield of Georgia, the only insurer in the marketplace, said Phoebe is "slightly more expensive" than hospitals in other markets, but the insurer has no other options.
"There are not many choices from the provider perspective," Kendrick said. "They deliver the care in that area, period, stop."
Joel Wernick, president and chief executive of the hospital system, said complaints of high prices are unsubstantiated. "We've not really raised prices or altered our prices in some time," he said in an interview.
But insurance brokers and health policy experts said that Phoebe's rates for private insurers are higher than they would otherwise be to make up for the money the system loses when it cares for the large uninsured population. Aside from MillerCoors and Procter & Gamble, there are not a lot of the large employers that hospitals and doctors usually rely on for rich payments. "At the end of the day, if you're an institution this size and you've got a small commercial population, you've got to get that money from somewhere," said John Crew, a Savannah consultant to hospitals and physicians.
Almost 11 percent of Phoebe's bills were not collected because the services were provided to patients who could not or did not pay, according to the hospital's most recent audit.
In recent months, Phoebe has taken some steps to reduce its costs. Last year it cut 160 jobs and hired consultants affiliated with the Geisinger Health System, which runs a central Pennsylvania hospital group known for efficiency, to help identify ways to save money. "We may have to start lopping off services that are not economically rewarding," said Doug Patten, chief medical officer. "We probably have been overly permissive in the past in saying, 'Yes, we will take care of you.'"
Kaiser Health News is an editorially independent program of the Henry J. Kaiser Family Foundation, a nonprofit, nonpartisan health policy research and communications organization not affiliated with Kaiser Permanente.