When buying health insurance, where you live matters.
In Pennsylvania and a half-dozen other states, consumers in some cities will pay at least 50 percent more for the same type of coverage than their friends and relatives in other parts of the state.
A 40-year-old in Philadelphia, for instance, will spend $300 a month to buy a mid-level insurance plan in the new "Obamacare" marketplace - 77 percent more than a 40-year-old in Pittsburgh, where the same type of coverage will cost a more modest $169 a month. Lower-income people eligible for federal subsidies will spend less.
"We know that Philadelphia is one of the most expensive metro areas in the country, and the rest of the state is more like small-city America, which tends to be cheaper," said Mark Pauly, professor of health-care management at the University of Pennsylvania.
Long a fact of life in the world of insurance brokers, rate variations within a single state have suddenly been thrown into sharp relief because, for the first time, consumers can compare prices by logging into the new online marketplaces.
This week, the Obama administration released average monthly premium prices for the policies that will be sold in the 36 states whose markets are being overseen entirely or in part by the federal government.
With only one rating region in New Jersey, mid-level plans there will cost about 6 percent more than those in the Philadelphia region, the federal data show.
"Identical people with identical incomes will face very different choice and cost of plans," said William Custer, director of the Center for Health Services Research at Georgia State University.
Large rate variations are also evident among regions of Georgia, where premiums may vary as much as 102 percent, Wisconsin (82 percent), California (56 percent), Arizona (55 percent), Missouri (52 percent), and Florida (52 percent).
Next year, an estimated 7 million people are expected to enroll in coverage through the new market, which opens for enrollment on Tuesday. Most states, including Pennsylvania and New Jersey, defaulted to the federal government to operate their marketplaces. Most of those who enroll next year are expected to qualify for subsidies to help defray the cost of insurance.
Competition among insurers often correlates with lower prices, but that is only part of the picture. Insurers say they set premiums based on expectations about who will enroll: Will newcomers be generally young and healthy or older or sicker? Other factors include what they pay for labor costs and whether they've been able to negotiate favorable rates with hospitals, doctors, and other providers.
Some insurers may price low to attract market share. Others are creating insurance plans that limit the network of doctors or hospitals to keep premiums low. Cost-of-living variations also play a role.
Philadelphia has both the highest costs in Pennsylvania and the highest use of medical care, which accounts for much of the higher premiums, said Brian Lobley, senior vice president of marketing and consumer business for Independence Blue Cross, the region's largest insurer.
But something else is going on besides a difference in costs, Penn's Pauly said.
It's likely market competition between insurers and rival hospital systems. They can spur tougher negotiations between insurers and hospitals, which might agree to lower charges. And regions with competing insurers often have lower premiums.
"There is something of a price war right now" in Pittsburgh between insurer Highmark and the University of Pittsburgh Medical Center, which also has its own insurance plan, said Joel Ario, a managing director with a consultant, Manatt Health Solutions, and a former state insurance commissioner. "They've got the ideal situation, with competing insurers and competing hospital systems."
In Philadelphia, by contrast, there are many hospitals, and each has market clout.
"They can resist any effort to cut them out of a network or to bargain" because insurers believe they must have every hospital in their network or risk losing customers, Pauly said.
Experts say the impact of price variations on enrollment is hard to predict.
"That's the question we're all asking ourselves . . . but I don't see people hopping on the bus and relocating to Pittsburgh" to get a better rate, said Michael Campbell, director of the Interdisciplinary Health Law Clinic at Villanova University's Law School.