What factors determine my health insurance rates?
UPDATED: Dec 3, 2014
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Asked December 3, 2014
Health insurance premiums are determined by looking at a number of factors. Your physical and medical risks have to assessed, along with your personal demographics such as age, marital status and gender. Finally, the risks you take with your health, such as smoking tobacco, drinking to excess, or activities such as rock climbing or skydiving are taken into account so the insurer can charge you premiums which match the risks you take.
Your actual health is the primary concern which sets your rates. This includes any medical conditions you have a family history of, such as diabetes, heart disease, or cancer. You may not have diabetes at the moment, but if your family medical history shows the disease popping up regularly, you will be classified as a higher risk. Additionally, your BMI, or Body Mass Index, will be used to determine the risk of you developing medical problems farther down the road. Since a high BMI has been linked to many medical problems, including sleep apnea, heart attack, and kidney disease, this number will also play a factor in your health insurance rates.
Your personal demographics are also important. Younger people usually require less medical care, for example, while women have higher and more expensive medical needs. Single people, statistically, lead more dangerous lives, and your medical needs will be influenced by your occupation. By looking at the facts surrounding your life and lifestyle, insurance companies can more accurately determine what it will cost to provide you with health insurance. Even the Zip code here you live will affect the rates you pay, based on health and longevity statistics for your specific location.
Your activities can have a large impact on your health insurance premiums. For example, if you enjoy high-risk activities like diving or hang gliding, your rates will increase to match the increased risk of potential injury. If you work in a field which frequently exposes you to hazardous conditions, your rates will increase based on the idea that you are more likely to suffer a serious or even terminal injury. This includes things like smoking, which has serious health risks, and drinking alcohol which can lead to kidney, liver, and heart complications. For insurance companies, the more know about you, the better they can price your coverage to match your specific needs.
Answered December 3, 2014 by Anonymous