What Factors Help Determine Your Health Insurance Premiums?

Almost no one gets health insurance or medical care for free. When you buy a plan, you often have to pay for your coverage. Most insurance companies charge their policyholders premiums.

Premiums are essentially the bill you pay your insurer for covering you. They vary from carrier to carrier. They can even vary from person to person. 

How Insurers Determine Premiums

Your risk level affects how much financial burden an insurer assumes by covering you. If you have a higher risk, the burden on the company is usually greater. Most insurance companies charge higher premiums for those with higher risks.

Insurers often use a variety of criteria to help them determine your risk level. These might include:

• Body Mass Index (BMI): Elevated BMIs usually indicate that someone is overweight. People who carry extra weight usually expose themselves to higher risks for other conditions like heart disease, diabetes and high blood pressure. 
•  Tobacco Use: If someone uses Tobacco, they risk considerable health damage. 
•  Age: People of different ages have different health risks and needs. For example, older people, generally, have more health needs than a young person. 
• Location: Where you live can affect how much you pay for coverage. Each state manages its insurance market regulations differently, and that can affect prices. Other cultural or lifestyle factors may also impact an area’s tendency to face health risks.
• Profession: Certain workplace hazards might impact a person's risk for developing certain illnesses or sustaining injury. Some policies might charge more for workers in industries with high risks.
• Marital Status: Whether you're married might impact your health, which could influence your premiums. Plus, once you get married, you might want to add your new spouse to your health insurance. These, and more factors could change your policy prices.

Not every insurer will use all of these statistics to determine your premium prices.

Indeed, the law forbids insurers to use some of these factors when issuing certain plans. The law restricts the factors an insurer can use to set rates. They might be able to use your age, location, tobacco use, enrollment status, and plan category to determine your rates. However, they cannot use factors like pre-existing conditions or gender.

When searching for health insurance, your independent agent can help you determine your needs. They can then compare policy options to get affordable coverage that meets your specifications.