What Factors Will Increase my Costs?

The cost of health insurance depends on several key factors, some of which are beyond your control. When you apply for health insurance, your application will be reviewed by an underwriter, who will evaluate your current condition, medical history and other criteria to determine how much it will cost to insure you. The higher the risk that you may require medical care, the higher your costs are likely to be. The type of coverage you need and the insurance provider you choose can also increase your costs.

Personal Risk Factors

Insurance providers consider your age, gender, current health status, smoking history, history of prior illnesses and injuries, occupation and the area where you live when they calculate your insurance rates. Age is one of the most significant risk factors, from an insurance provider's perspective. As the body ages, the likelihood that you will need medical care increases, even if you're healthy, fit and active. While a younger adult may have very affordable premiums, the cost of coverage will increase incrementally over time.

Older adults are more likely to have acute illnesses, develop chronic diseases like arthritis or high blood pressure and have serious injuries that require extensive rehabilitation. For this reason, the cost of insuring older individuals is higher. Younger adults with a complicated health history will have higher rates than applicants who have never had any serious medical concerns. Smokers have higher rates than non-smokers because of the link between tobacco use and disease.

More than any other lifestyle factor, a history of smoking will increase the cost of health insurance. Tobacco use is associated with a higher risk of high blood pressure, heart attacks, strokes, lung disease, several types of cancer and osteoporosis. Because of the strong connection between smoking and illness, smokers must pay more for their coverage than those who don't smoke.

Having a pre existing medical condition can affect the cost of health insurance. Depending on an insurance provider's underwriting policies, the nature of the condition and the length of time since you experienced symptoms, a pre existing condition can raise your premium. An insurance provider may refuse to cover a pre existing condition until a certain period of time has passed. After this time, known as the exclusion period, you may receive coverage for this illness, or you may be offered coverage at a higher rate.

Extent of Coverage

The type of health insurance you choose and the extent of your benefits can increase the cost of your policy. A managed care plan that offers full medical benefits, including preventive care, prescription medication coverage, outpatient services and inpatient treatment, will cost more each month than a fee for service policy that covers only severe illness or injury. An individual health insurance policy may cost less than a plan for couples or families.

As a general rule, a policy that offers more extensive benefits and more flexible treatment options will cost more than a plan with limited benefits and restricted options. If your policy gives you access to a large providers network with few limitations on your choices, you may pay more than a member who has access to a smaller network and fewer treatment options. When you buy health insurance, it's important to decide whether the benefits you receive are worth the cost of your premium.

As you consider the factors that increase the cost of health insurance, consider the importance of choosing the right insurance provider. Rates and fee structures can vary significantly from one insurer to another. By comparing estimates before you make a final decision, you'll increase your chances of getting affordable coverage.

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