5 Factors That Affect The Cost Of Health Insurance

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5 Factors That Affect The Cost Of Health Insurance
07 Dec 2022
5 min read

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The cost of medical treatment has increased significantly in recent years, which has led to a large increase in the number of customers buying health insurance policies. To ensure their family has a safety net in case of an emergency, people are going beyond purchasing individual insurance and are instead purchasing policies for their entire family. In addition to providing you with protection during difficult times, health insurance has fiscal advantages This blog will discuss some major Factors That Affect the Cost of Health Insurance.

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Among the ideal ways to deal with rising costs and access to appropriate medical care is to purchase health insurance coverage. Health insurance coverage increases your chance of being protected from unforeseen, excessive medical expenses

Many individuals are not getting a health insurance policy because they consider it a luxury or an unnecessary expense. But what they needed to know is that getting health insurance is a wise move to make. It will be a safety net if you get sick or develop a terminal disease requiring intensive medication and hospital visits.

The cost of health insurance is a major concern for individuals and families, especially those on low or fixed incomes. Thus, it’s important to be aware of the different factors that affect the cost of health insurance when comparing policies.

To do that, check out the tips we have shared below on saving your health insurance cost. 

5 Factors That Affect The Cost Of Health Insurance

1. Your Age When You Apply for the Insurance 

Insurance costs are high for middle-aged to late adults. Typically, premiums for aged individuals are thrice as expensive as those for younger generations. Although it may seem unjust, increasing premiums for elderly customers makes financial sense. 

Chronic conditions are more likely to emerge as you age. Elderly adults tend to require health services more frequently than younger individuals. Of course, it's normal to feel wary about spending around $700 monthly if you're a healthy 60-year-old who merely requires to visit your physician for a yearly checkup. 

However, no one can predict when we will acquire serious health conditions, especially as we age. Thus, it’s recommended to start purchasing health insurance while you’re still young. 

Start comparing various health insurance coverage from various providers now! Doing so will help you know which coverage suits you. You can check out more information about health insurance to shop health care plans and explore different insurance providers and coverage available according to your needs. 

2. Your Location

The cost of your health insurance coverage is influenced by where you reside, just as someone who lives in Los Angeles or New York is likely to be charged a higher rent than someone who lives in Kansas City or Memphis.

Your rates are impacted by the laws of your state or county as well as the level of local competition. Consider that community rating rules set limits on how much insurance providers can charge individuals who have various medical problems.

In addition, you also need to consider that several providers are vying for you. You can typically find lower premiums than you would if there were just one provider in your area.

Thus, doing your research first before jumping into applying for health insurance coverage is highly advised. Doing so will help you have a good overview of your options. 

3. Your Lifestyle Choice

Another key factor that could affect your health insurance premium is your lifestyle. When acquiring health insurance, you must respond to extensive health and lifestyle inquiries. 

These responses provide insurance providers' perception of your general health. Before reviewing your application for coverage, insurance providers may require extra medical records or tests based on your answers.

If you're living an unhealthy lifestyle, insurance companies will consider you a liability as you risk acquiring severe health issues in the future than those who live an active lifestyle, which also puts the provider at risk. In such circumstances, your provider will need to cover bigger hospital and prescription costs.

Also Read: How to Save on Your Automobile Insurance

4. Pre-existing Health Conditions

Before being covered by a health insurance provider, a subscriber may be required to undergo a medical checkup. In addition, you might be asked to disclose any existing medical conditions. Your provider then evaluates the risk involved in covering you. 

Depending on the risks, the provider will assess your situation and provide the cost of your medical insurance accordingly. Some insurance companies may deny your application, while others might impose a waiting time for a condition like diabetes. Some companies may impose a higher premium, while others offer insurance with no waiting time.

5. Your Chosen Health Insurance Coverage

There are often various types to choose from when selecting a plan. Health insurance policies are assessed based on the type of coverage they provide and your overall out-of-pocket costs. Your premium will generally be higher if you have lesser deductibles.

The ACA recognized four different types of health insurance plans which are:

Platinum Health Insurance Plan:

The most expensive plan is the Platinum insurance plan. However, they also feature the smallest deductibles and out-of-pocket costs. A platinum plan's contribution will cover your medical expenses in rare situations like having a chronic illness. You might need platinum coverage if you visit a doctor for several different ailments or have higher-than-average medical costs.

Gold Health Insurance Plan:

Although insurance payments for a gold plan are high, out-of-pocket costs for doctor visits and other medical needs are substantially lower. A gold insurance plan can be the best option if you require significant medical attention or suffer from at least one chronic disease.

Silver Health Insurance Plan:

A silver insurance plan could give you a slightly higher insurance payment with small out-of-pocket costs. A silver plan is the most affordable choice if you need to see a physician for something other than ordinary preventative care and you aren't suffering from a chronic disease. For instance, you might select a silver plan if you frequently visit your physician when you suffer from a sinus infection or dry cough.

Bronze Health Insurance Plan:

The bronze plans offer the highest out-of-pocket costs but minor insurance payments. If you get a bronze insurance plan, deductibles are sometimes over $6,000 yearly. A bronze plan is typically the best option if you infrequently or never require medical attention beyond preventative measures.

There is also a fifth type of health insurance known as catastrophic plans that are only offered to individuals aged 30 and below with proof of financial crisis.  If you're still in your 20s, the catastrophic plan might be a decent choice since you are still in optimal health and don't have enough money to pay for health insurance. Additionally, this plan offers the biggest deductibles but has the lowest premiums.

Final Words

Many factors could affect the cost of a health insurance policy. Understanding these factors will help you make the right decisions in choosing the suitable insurance provider and policy based on your needs.

 Disclaimer: This article is written by one of our guest writers Think With Niche is not responsible for it.