What Affects A Health Insurance Premium Cost

Health insurance covers medical treatment in case of accidents or illnesses. Before getting health insurance services, you need to understand the costs involved. Ideally, you want an affordable policy that offers you ample coverage. So, what affects health insurance premium costs?

Geographical Location

Each location has unique factors, including insurance competition and disease prevalence. For instance, if there are many medical insurance services in your location, you may access pocket-friendly premium terms as insurers strive towards becoming more competitive. Also, if your region is a known hot-spot for certain diseases, the insurer will charge higher premiums.

Age

The older you get, the higher your health insurance premiums become. As you age, your body becomes prone to chronic diseases. Hence, health insurance services will probably charge you a high premium due to the increased risk of diseases.

Tobacco Use

If you're a tobacco user or smoker or consumed tobacco within the last year, health insurance services will likely charge you a high premium. That's because smoking increases health risks, and you can develop respiratory diseases or even lung cancer with time.

Occupation

Generally, you may pay a low premium if your work involves fewer risks, such as teaching. In contrast, you're likely to pay higher premiums due to increased injury risks if you work high-risk jobs such as construction work.

Medical History

If you have a history of contracting illnesses or currently have an existing disease, this means you need regular medical care. Therefore, your medical insurance premium will be high. But if you've not had past diseases and are relatively healthy, you will pay a smaller premium.

The Number of People Covered by the Medical Insurance Policy

Ideally, if your medical insurance plan covers many people, you're likely to pay a higher premium. However, this makes economic sense as you can purchase a group policy that is usually cheaper than buying independent health policies for every member of your family.

Body Mass Index (BMI)

People with high BMI are at high risk of suffering from obesity, diabetes, and heart-related diseases. These people need regular medical care. Therefore, a high BMI attracts high medical insurance premium rates.

Coinsurance 

Coinsurance means that you pay part of the claim, and the insurer makes a partial payment as well toward a claim. Coinsurance significantly reduces the premium amount. 

Factors that affect the charges of health insurance services include coinsurance features, BMI, age, medical history, occupation, tobacco use, and who gets covered in the health insurance policy. Understanding these factors can help you know the cost of your medical insurance premium and plan your finances accordingly.