In Battle Between Nonprofit And For-Profit Health Plans, Nonprofits Have Edge On Price

SUNNYVALE, Calif., May 22, 2013 /PRNewswire-USNewswire/ -- A new analysis from HealthPocket, Inc. compares health insurance plans offered by nonprofit and for-profit insurers operating in the same region. On average, nonprofit plans are more likely to have lower premiums and better protections against out-of-pocket costs. The study included health plans in a cross-section of major U.S. cities: Pittsburgh, Miami, Kansas City (Missouri), Dallas, Los Angeles, and Portland (Oregon).

In 47 percent of the comparisons, HealthPocket found that non-profit plans had the lowest average premium. For-profit health plans had the lowest premium in 39 percent of comparisons, with the remaining 14 percent classified as ties.

In 56 percent of the comparisons of limits on out-of-pocket costs, nonprofit plans had less expensive limits for the consumer, while for-profits had the lowest limits in only 28 percent of the cases. The two types of plans were statistically tied in the remaining 17 percent of the comparisons.

For decades, analysts have debated whether profit is an impediment to affordable healthcare or whether the elimination of commercial insurers would translate into lower-cost insurance for consumers. HealthPocket's research demonstrates that while profits are a relevant factor to plan affordability they do not preclude competitive premiums.

"Nonprofit health plans are more likely to have lower premiums, but the notion that nonprofit health insurers will always provide less expensive plans is not defensible. It wasn't the case for half of the premium comparisons we performed. Consumers need to look at all options when shopping for health insurance," said Kev Coleman, head of Research & Data at HealthPocket. "When plan offerings become more standardized under the Affordable Care Act in 2014, it will be crucial for consumers to examine all types of plans to get the best deal."

The results of the study were based on analysis of 2,372 premium quotes collected on May 6, 2013, from 593 health plans in Pittsburgh, Miami, Kansas City (Missouri), Dallas, Los Angeles, and Portland (Oregon). Nonprofit and for-profit health plan premiums were compared in each city for individual female and male nonsmokers ages 25 and 50.

This HealthPocket InfoStat is part of a series using health plan data to produce unbiased market analysis and guidance for consumers navigating America's changing health insurance environment. To compare how nonprofit and for-profit health plans are currently priced, visit HealthPocket's Plan Comparison Tool which also designates which plans are nonprofit by the "NP" icon.

About HealthPocket
HealthPocket.com is a free website that compares and ranks all health plans available to an individual, family, or small business, so everyone can make their best health plan decision and save on their out of pocket costs. The Company uses only objective data from government, nonprofit, and private sources that carry no conditions that might restrict the site from serving as an unbiased resource. The founders of HealthPocket.com spent decades pioneering online access to health insurance information and knew they could offer something different that can positively change how people buy and use healthcare in the U.S. Learn more at www.HealthPocket.com.

SOURCE HealthPocket

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