Health insurance costs are determined by many different factors, including age, personal and family health history, scope of insurance benefits, and cost-sharing obligations. Health care premiums are also determined by the country or area you live in, the pharmaceutical companies and hospitals connected to your insurance provider, and your lifestyle.
Premiums for health insurance vary for many reasons, and costs have increased over the years. Here are the major contributing factors that affect the cost of health insurance:
Note that when you fill out forms for insurance leads, age must be indicated. This is because age is a major determinant of your health insurance premium. The older you are, the higher your insurance costs are, as you have greater risks of getting sick and needing more medical attention.
Personal and family health history
Your current and family health history greatly affect health insurance costs. When you apply for health insurance coverage, companies interview and dig up your personal and health history. They carry out laboratory tests, such as urine and blood sampling, that will determine existing health conditions. When illnesses are found and when certain diseases run in your family, such as high blood pressure, diabetes, cancer, heart disease, and other diseases, chances are, your premiums will be higher compared to individuals with healthier records.
Scope of insurance benefits
The scope of your health coverage also dictates your insurance costs. The more all-inclusive the health coverage, the higher the cost would be. You can choose from a variety of health services from your insurance provider, from basic to comprehensive, that match your needs with your budget.
Deductibles, coinsurance, and co-payments are common examples of cost-sharing requirements. The higher your cost-sharing obligation, the cheaper your health insurance premium would be. The thing is, however, that you are still required to spend additional money out of pocket in addition to the insurance premiums you are paying for your health insurance coverage.
Deductibles are out-of-pocket costs you need to spend before your health care coverage begins. After meeting your deductibles, some health care companies require coinsurance, wherein you will pay part of the cost of services covered. On the other hand, some companies require a flat fee, otherwise known as co-payment, for a particular service you need. To help low-income families afford health care insurance with cost-sharing requirements, the Medicaid program assists by dealing with these out-of-pocket expenses.
Country or area you live in
Even the place you live in matters when it comes to insurance costs. Insurance companies rate states according to the age of a population. Insurance premiums are said to be higher with the aging population, as costs also increase to insure older people. Some areas also have mandated benefits that companies are forced to include in their coverage and that individuals are forced to pay for. Examples include mental health coverage, alcohol abuse treatment, fertility treatment, and chiropractic care.
Pharmaceutical companies and hospitals
Insurance companies tie up with pharmaceutical companies and hospitals for their health care services. As pharmaceutical companies produce more advanced medicine and hospitals provide intensive care, more advanced treatment and more expensive medical technology, health insurance costs also increase.
Your lifestyle can also affect your health insurance premiums. If your lifestyle poses health risks, insurance would be more expensive. Smokers, the obese, those who eat unhealthy foods, alcoholics, and those found to have been using drugs are considered high risk individuals. There are some insurance companies who even reject providing health care coverage to these individuals.
Always find ways to save on your insurance costs without sacrificing the benefits. If you have a limited budget, you need to practice a healthy lifestyle, limit your coverage to what you basically need, and try to use the benefits of the Medicaid program. Ask for quotations from different companies and compare their services.