Do You Know What Factors Determine the Cost of Health Insurance?
By Brian Vann
Major factors that determine the cost of health insurance.
The cost of health insurance effects everyone, those who are starting their own business or getting married. There are number of factors which determine these cost, including your insurability, your health condition, your choice of plan, your location, your age, and gender. Some plans cost less, however, and some people pay less for their insurance, that's because these specific factors are calculated into the cost of health insurance.
There are two main categories of health insurance, individual health insurance and group health insurance. Group health insurance is supplied by your employer, so the factor determining this type of insurance are related to the choice by the human resource department of the company and the people who make up the group. Individual health insurance is a contract between you and the health insurance company and is based on your individual health and lifestyle. An individual plan may include you and your family.
Here are a summary of the contributing factors that affect the cost of health insurance:
1. Your Insurability:
With group health insurance, the health of the entire group is taken into consideration in order to determine the cost. With an individual plan the health conditions of you and your family are evaluated. Therefore, an application must be filled out to include the health conditions and questions for all those wish to be covered by the plan. With an individual plan , an insurance company can choose to deny insurance to someone who has pre-existing health problems. An important question to consider when taking out an individual health policy, is are you insurable.
2. Your Health Condition:
Your health condition are an important ingredient of the underwriting process. When you apply for health insurance coverage, companies interview and dig up your personal and health history. They carry out laboratory test, such as urine and blood sampling that will determine your health conditions. When illnesses are found and when particular disease run in your family, such as high blood pressure, diabetes, heart disease, cancer, and other diseases, chances are it will affect your premiums.
Because tobacco use affects your health, people who smoke or use tobacco products will pay an additional premium based on their smoking status. This could be an additional 10% of premium, depending upon the company.
Maternity is generally not covered on an individual plan, unless a rider is offered. There is an additional cost for maternity insurance. Many plans may cover complications of pregnancy even if you do not have maternity insurance.
3. Your Choice of Plan:
The plan that you choose will affect the premium you will pay. The more risk you assume, the lower the premium. The more risk the insurance company assumes the higher the premium, your risk is best summed up in the term "Out of Pocket Maximum" This refers to the maximum money you would pay for co-payments and deductibles. therefore the plan selection has an impact in what health insurance will cost. The plan options such as prescription drugs, office visits and dental will also impact a health plan.
4. Your Location:
Another factor which helps determine your insurance is where you live, your county and zip code will be used to determine your premium, the more rural counties are less expensive than urban counties. Larger cities tend to have higher costs than smaller towns, and coastal areas tend to cost more for care than middle America.
5. Your Age and Gender:
The older you are the more expensive your health insurance will be. The reason for this is because as we get older we have more health problems and go to the doctor more often, and premiums increase as you get older.
Also younger men usually have lower premiums than women of the same age, women are more likely to go to the doctor than men at these ages this means women pay higher premium than men do for health insurance. Men die sooner so they pay higher life insurance premiums.
When you understand the determining factors of the costs of buying and using health insurance, it's easier to find the insurance plan that's best for you and your family. Best of all, you'll be able to get the most out of the insurance plan you choose.
Please pass this article on to your neighbors, friends, and the ones you care about.
About the Author
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| Brian Vann, B.D. Benefit Provider
Raleigh, NC 27610
919-410-9523
If you would like to re-print this article, please contact the author.
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