AP Model Meghan McMahon laughs after giving a sticker to Iggy Cole, age 3, who gave it to his baby brother August, as McMahon handed out literature and juice shots on an outdoor pedestrian mall, encouraging the public to get health coverage under the Affordable Care Act, during a promotional campaign launched by Colorado HealthOP, a independent non-profit health care co-op, in Denver, Thursday March 20, 2014. More than 250,000 Coloradans have become covered through the state-run insurance exchange since enrollment began October 1, 2013, and those who still do not have health insurance have two more weeks to get coverage or pay a fine. (AP Photo/Brennan Linsley)

By KRISTEN WYATT/Associated Press/March 30, 2014

DENVER (AP) Bill Fales wanted a new baler and a better irrigation system for the 700-acre ranch where he raises grass-fed beef cattle, but he scrapped those plans when he saw his new health insurance premiums.

His Cold Mountain Ranch is in western Colorados Rocky Mountains, a rural area where outpatient services are twice as expensive as the state average. Fales recently saw his monthly premiums jump 50 percent, to about $1,800 a month.

Health care has always been more expensive in far-flung communities, where actuarial insurance data show fewer doctors, specialists and hospitals, as well as older residents in need of more health care services. But the rural-urban cost divide has been exacerbated by the Affordable Care Act.

We've gone from letting the insurance companies use a pre-existing medical condition to jack up rates to having a pre-existing zip code being the reason health insurance is unaffordable, Fales said. Its just wrong.

Geography is one of only three determinants insurance companies are allowed to use to set premiums under the federal health care law, along with age and tobacco use. Insurance officials say they need such controls to remain viable.

If premiums are not allowed to keep up with underlying medical costs, no company is going to survive, said Robert Zirkelbach, a spokesman with Americas Health Insurance Plans, a Washington, D.C.-based industry group.

The nonpartisan Kaiser Family Foundation recently rated the Colorado region where Fales lives as the nations priciest, based on rates for the lowest-priced silver plan, a mid-level policy. In this part of the state, a region that includes Aspen, the cheapest mid-level plan is $483 a month. In Denver, the same plan is about $280 a month.

Other insurance price zones on the most-expensive list include rural areas in Georgia, Nevada, Wisconsin and Wyoming. But the cost differences between densely and sparsely populated areas shouldnt come as a shock, Zirkelbach said, because its simply more expensive to deliver care in such communities.

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Rural residents confront higher health care costs