Alabama has the third highest cost of health insurance in the United States trailing New York and South Carolina. The findings were based on a new analysis published by Elyssa Kirkham of GOBankingRates on Jan. 22, 2015. The comparison of health insurance costs between states was based on a single, nonsmoking, 40-year-old male with an income of $40,000.
One of the causes of high health insurance rates in Alabama is the refusal of the government of Alabama in the person of Governor Robert Bentley to accept any federal money for Medicaid assistance. This decision cost the state $117 million that Alabama tax payers must pay. The decision to opt out of Obamacare is a major reason Alabama has a $250 million budget deficit.
The most important reason for the high health insurance costs in Alabama is that Blue Cross and Blue Shield of Alabama have a virtual monopoly. Blue Cross and Blue Shield of Alabama provide health insurance coverage for all state employees. The rates that state employees pay for health coverage are much lower than the employees of private firms pay. Self employed people pay even higher rates.
The cost of health insurance is just not the monthly rates a person pays. The deductibles are actually higher for the cheapest health insurance plan in Alabama as provided by Blue Cross and Blue Shield of Alabama than the annual payments. The calendar year deductible for the Blue Saver Bronze plan is $6,850 per person or $13,700 maximum for a family. The annual premium for an individual is in excess of $5,580 and can be $1,500 per month for families.
The average income in Alabama was $42,830 in 2014 according to the U. S. Census. The per capita income in Alabama was $23,606 because more than one-half of the state does not work due to being retired, disabled, or being too young. An average person that works in Alabama pays as much as 29 percent of their income for health insurance and deductibles. Health insurance rates continue to rise in Alabama because Blue Cross and Blue Shield of Alabama is very careful to meet all the obligations to the Affordable Care Act that allow rate increases.
In the future the house of cards that health insurance is in Alabama will collapse. The number of people working will not be large enough to pay the cost of health insurance for state employees, the costs of Medicaid, and the costs for Medicare. Working people in Alabama should expect all of the senior executives at Blue Cross and Blue Shield of Alabama to give themselves another $1 million raise this year.