Your Health Insurance--and Your Health--Can Depend On Where You Live

In March 2020, as the pandemic was starting to ramp up, Sarah Lynch was winding down her last semester of law school. Newly diagnosed with an autoimmune disorder that left her more susceptible to serious illness or death from COVID-19, Lynch began quarantining with her parents in their Kansas City, Kan., home.

But she wasn’t entirely safe. While Lynch’s classes had moved online, one professor required her to come to campus for in-person tutoring.  

Within days, Lynch developed a high fever, cough, body aches, and difficulty breathing. Her parents rushed her to the hospital, where tests confirmed COVID. As Lynch fought for her life in the intensive care unit, her family faced another pressing problem: She had no health insurance. Then 26, she had aged out of her parent’s plan.

“I could neither afford [Obamacare] nor could I afford the university’s insurance,” Lynch said.

That might not have been the case everywhere. But Lynch falls below the federal poverty line--currently $12,880 a year--which means she doesn’t qualify for federal subsidies to lower insurance premiums. Under Affordable Care Act rules, she’s supposed to qualify for Medicaid. But Lynch lives in Kansas, one of states that hasn’t expanded its Medicaid program. 

In other words, geography rendered her ineligible for assistance. In another state, her low income would have qualified her for free health insurance through Medicaid.

After Lynch got sick, Kansas provided her with a bare-bones health plan that covered little beyond hospital care and that was only valid for a year. Now she’s without insurance again, even as she struggles with long-haul COVID symptoms that affect her joints, nerves, gastrointestinal tract, vision and, most devastating to Lynch, her cognitive abilities. 

“It’s taken me a year to get to the point where I’m speaking regularly,” she said. “And I still speak more slowly than I did.” 

As luck would have it, if Lynch lived a few miles away in Missouri, which, like every other neighboring state, has expanded Medicaid, she’d have access to free or low-cost health care. Friends and medical professionals have even suggested using a fake address, but Lynch refuses to commit fraud.

Lynch’s experience offers a stark example of how health insurance costs and coverage can vary widely for Americans depending where they live. Everything from premiums to out-of-pocket expenses to the life-saving medications allowed under a plan can be tied to location--and, as a result, research suggests worse health outcomes and medical debt are, too. 

"The system seems so broken," said April Holman, executive director of Alliance for a Healthy Kansas, a coalition of health and community organizations advocating for equitable access to healthcare. 

Holman points out that it costs Kansas tens of millions of dollars, as well as jobs, not to insure Lynch and others like her. If the holdout states expanded Medicaid, it would increase their federal revenue by $49 billion and add more than 1 million jobs, according to a recent analysis from the  Commonwealth Fund, a nonprofit organization that supports healthcare research. (The study includes Oklahoma and Missouri, which at the time had not implemented expansion programs.)

"It's pretty outrageous," Holman said. "If more people understood that, I think that they'd be outraged as well."

Even aside from Medicaid expansion, there is enormous variability in what people pay for health coverage, said Sara Collins, vice president for healthcare coverage and access at the Commonwealth Fund. People shouldn't be burdened with significant out-of-pocket costs in one state and not another, she said: "It's unfair." ‍

Location, location, location 

Nationwide, costs vary both for plans bought on healthcare exchanges and insurance tied to employment. For example, in 2019 in Hawaii, the average total cost of premiums and potential spending on deductibles for employer-based plans was $5,535 a year. In South Carolina it was $10,036—nearly twice as high, according to a 2020 analysis by the Commonwealth Fund. 

In another unfair twist, in states where the median income is below the national average, employees actually pay more for health insurance and care than those in higher-income states. As Collins put it, “They’re experiencing a double whammy.”

"Health care costs vary a lot from state to state," said Dr. David Grande, director of policy at the Penn Leonard David Institute of Health Economics at the University of Pennsylvania in Philadelphia. In areas where providers are consolidated into large practices or hospital systems, they have control over the market and can charge insurers more, he said. "These costs are passed along to consumers as higher health insurance premiums."

In contrast, federal subsidies have helped make premiums for marketplace plans more equitable, Collins said. But while those plans are more standardized than private insurance, deductibles and other out-of-pocket expenses still vary from one location to another.

The greatest inequities are between states that expanded Medicaid and those that didn’t. Under the American Rescue Plan, for example, premiums for a marketplace plan are free for individuals who earn $12,880 to $19,320 a year. Most people on Medicaid also pay little or no premiums. 

But in states that have not expanded Medicaid, Lynch and others who live below the poverty line are expected pay the full, unsubsidized cost of health insurance. For Lynch, that would be more than $4,000 a year for the Bronze, or lowest level, marketplace plan — an amount that’s out of reach for someone struggling to afford food and rent.  While she completed enough hours to graduate, Lynch's ongoing illness has made it impossible for her to work. 

Nationally about 4 million uninsured Americans could get affordable health coverage if the holdout states expanded their Medicaid programs, according to a recent report from the nonprofit Kaiser Family Foundation. 

Amber Ayala, a 21-year-old student who works part-time at a Houston grocery store, falls into that coverage gap. She can’t afford insurance on her own and she doesn’t qualify for assistance in Texas, which also hasn’t expanded Medicaid. She says the pandemic has made clear just how precarious her situation is.

“I realized oh, my gosh, I do not have health insurance. What if I get really sick COVID-19?” she said. “I would have to choose between going into debt or risking my health.”‍‍

An address can mean you're covered--or not

By mandating that health plans provide benefits in 10 essential areas, the ACA brought some uniformity to coverage nationwide. Still, the law provides wiggle room. 

Although mental healthcare and treatment for substance use disorders are essential benefits, a 2020 study published in Health Economics, Policy, and Law, a peer-reviewed journal, found wide variation in state requirements for coverage. For instance, South Carolina mandates that plans cover just seven days of in-patient treatment a year while Oregon allows for as many as 45.

Beyond essential benefits, the discrepancies can be even greater. When Anthony, who is in his mid-30s, moved to South Carolina, he didn’t know the state doesn’t require insurers to cover fertility treatments. He and his wife both work for technology companies and felt comfortable financially until they learned they’d have to spend tens of thousands of dollars trying to start a family. (Anthony asked that his last name be withheld because he doesn’t want their fertility struggles made public.)

They considered relocating to the state where his company is headquartered and coverage would be better, but did not want to leave her job and their family behind. Meanwhile, his former home state of Connecticut recently required health plans to cover fertility treatment. “That was kind of a kick in the teeth,” Anthony said. 

So far, Anthony says, they have taken out a $35,000 loan to cover the cost of treatments. But the couple remains childless, and is deciding whether to borrow more. 

Markus Grey, 28, a janitor and cashier in Brookings, S.D., also considered moving to a state that requires specific insurance coverage, in his case for transgender-related health care. South Dakota doesn't have such a nondiscrimination law and his insurer would not cover a double mastectomy, which costs more than $10,000. 

"The thought was really hard," he said. "My entire life is here."

Grey did eventually find a plan through the ACA that covered his surgery, underscoring the importance of shopping around when choosing a healthcare plan.‍

Voting for--or against--your healthcare interests

Politics play a major role in who has what healthcare where. For example, on average, workers in states that Donald Trump won in 2020 pay higher insurance premiums and deductibles for employer-based plans than those in states that went for Joe Biden. The dozen states that haven’t expanded Medicaid also lean Republican, according to the Commonwealth Fund study.

“The fight over Medicaid expansion has been dominated by political considerations,” Grande, the policy director, said. ”Republican governors don’t want to be seen as supporting the Affordable Care Act in any way, even when it makes financial sense for their states.” 

He added that new federal incentives may help overcome political resistance, “but it won’t happen overnight.”

Right now the inequities are at least partly responsible for Americans falling $140 billion into medical debt. A recent study published in the Journal of the American Medical Association found that medical debt is highest among people living in the South and low-income areas—in many cases the same states that have not expanded Medicaid.

Since passage of the Affordable Care Act in 2011, overall medical debt has decreased. researchers found. But the gap between states that did and did not expand Medicaid has widened. In 2020, Americans living in states without Medicaid expansion owed collection agencies an average of $550 for medical expenses compared to $175 for those in the rest of the country.

Last February, Laura Kelly, the Democratic governor of Kansas, proposed legislation to expand Medicaid, but the Republican-led legislature adjourned in May without taking up the bill. Sarah Lynch, who recently took the bar exam despite her health limitations, says she has no faith that her state leaders will come through. She has resigned herself to being unable to afford some medications or medical visits until she is well enough to get a full-time job with benefits.

"I no longer have any expectations or hope when it comes to health care," Lynch said. "I'm just stuck in a particular place that has no regard for the welfare of all its citizens."‍

Teresa Carr is an award-winning health-and-science journalist based in Golden, Colo. She writes the column Matters of Fact for Undark.