How are health insurance coverage rates calculated?
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Asked June 12, 2013
Insurance premiums, regardless of the type of policy, depend on many different factors. Auto insurance will factor your driving record heavily, and home insurance will look at the size and age of the home. Health insurance puts an emphasis on your health in the same way, along with the many common factors that most policies will look at.
Your age, occupation, and place of residence are important factors. How long you have lived plays a factor in the expected medical care you will need, and both your job and residence can have an impact on your Index state of health as well as long-term implications. For insurance companies, balancing all of the risks associated with your health is vital to charging you the right premiums for the coverage.
If you smoke or drink heavily, that will play a factor in your health insurance. Similarly, any pre-existing conditions you have may increase the premiums or result in exclusions for certain procedures. They once resulted in being denied coverage, but the Affordable Care Act, commonly known as Obamacare, has mandated that insurers must accept preexisting conditions.
Any risky activities you participate in will affect your health insurance premiums. Bungee jumping, skydiving, or mountain climbing are all examples of risky behaviors which could cost you higher premiums. In general, anything you do which increases the risks of affecting your health will likewise increase your health insurance premiums.
Read more about how to find cheap health insurance.
Similarly, nonsmokers and people who lead largely calm lives are going to pay lower premiums. Just as the costs increase when risks go up, they decrease as the risks go down. If you manage to stay smoke-free for a year, the insurance company will convert your premiums over to nonsmoker rates, saving you a noticeable amount in premiums.
Answered June 12, 2013 by Anonymous