Foundations of Health Insurance

Foundations of Health Insurance

Foundations of Health Insurance

How are your health insurance premiums determined? Why does it seem everybody pays at least slightly different premiums for healthcare? Well, it is probably not news that healthcare in the United States is complex. In spite of those complexities, there are still some basic foundations that affect the price of your health insurance you should be aware of. To get a handle on the process, here are some factors that impact the price you pay.

Your Age

While car insurance may actually become less expensive as you age, health insurance will become more expensive. This is understandable as older consumers will generally experience more health issues than younger ones.

Your Location

Where you live will definitely affect the premiums you pay based on your state and how many health insurance companies are competing for your business. The fewer the companies to choose from, the more expensive your health insurance premiums will likely be.

Use of Tobacco

While the Affordable Care Act (ACA) limits the specific factors that can impact rates, tobacco use remains one of them . Tobacco users will likely be subject to a surcharge making health insurance slightly more expensive.

Type of Plan Chosen

It is fair to assume that the less out-of-pocket expenses you will have under your health insurance plan, the higher premiums you will pay. This includes your deductible, co-pays for office visits, prescription costs and policy limits. The ACA categorizes healthcare plans in four categories.

  • These are the least expensive plans and have the highest potential out-of-pocket expenses. Deductibles can start at $5,000 and may be sufficient for those who rarely see a doctor except for preventative care.
  • Silver. These plans are slightly more expensive than Bronze plans but will also have lower out-of-pocket expenses. These may be sufficient for those who have an occasional illness but who do not suffer from any chronic health issues.
  • Gold. Although premiums for Gold Plans can be high, coverage is much better with less likely out-of-pocket expenses. This is an excellent choice for those who frequently visit the doctor or experience chronic illnesses.
  • Platinum. These plans are the most expensive but have the lowest deductibles and out-of-pocket expenses. Under certain circumstances, medical costs may be completely covered by a Platinum Plan. This is a plan that is viable for those who frequently have health issues and chronic conditions.

Health insurance can be a confusing topic. It can also have a significant impact on your finances. If you have questions about your coverage or would like to know about options available to you, please contact us. Let our independent agents go to work for you.


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