The Six Factors That Affect Health Insurance Quotes
Before the Affordable Care Act was enacted in 2014, health insurance companies could take numerous factors into account when determining health insurance premiums. With the new healthcare law in effect, these companies are now severely limited by the factors they can use to determine health insurance premiums. Now, you can expect health insurance companies to ask five facts about your life before offering you a health insurance quote. For some low-income individuals, a sixth factor can also affect how much they will have to pay for health insurance.
Health insurance companies will consider your family size when offering a health insurance quote. Individuals or couples will receive lower quotes than families who seek health insurance coverage.
According to HealthCare.gov, premiums for older Americans can be up to three times more expensive than premiums for younger individuals. Before the Affordable Care Act, insurers could charge older applicants premiums that were up to five times more expensive. While this change may be good news for older Americans, younger Americans should expect to pay more.
Where you live will also affect the health insurance quotes you receive. In some areas, it costs more to provide health care to local residents, due to factors such as cost of living and competition among healthcare providers. CNBC reports that health insurance premiums remain high for people in rural areas. In many cases, high premiums are a result of a lack of competition between insurance companies that offer plans for individuals in that area.
Smokers and other tobacco users should be prepared to pay up to 50 percent more for the same health insurance coverage, according to the HealthCare.gov website. The Centers for Disease Control and Prevention estimates that this extra charge could affect up to 19 percent of the population. However, some states, like New York, California and New Jersey, have banned increased rates for smokers. Insurance companies in other states, such as Texas, Iowa and Idaho, are charging the maximum fee. Experts predict most insurers will charge somewhere in between the two extremes to mitigate costs without alienating potential clients.
Health Insurance Plan Type
Currently, the federal health insurance marketplace offers five different categories of health insurance plans. These plans are grouped by their deductibles, premium costs and overall out-of-pocket costs. Platinum plans, for example, have higher premiums but lower out-of-pocket costs.
Federal Health Insurance Premium Subsidies
National Public Radio estimates that the U.S. government will offer 1 trillion dollars in health insurance subsidies over the next 10 years. The Affordable Care Act specifies that people who make between 138 and 400 percent of the poverty level will qualify for some form of health insurance subsidy. These subsidies will be instantly applied to health insurance premiums, so the out-of-pocket costs will be lowered for qualifying participants. Individuals who make less than 138 percent of the poverty level may qualify for expanded Medicaid in their state.
Factors That Should not Affect Health Insurance Quotes
In the past, insurance companies could charge women more for health insurance. They could also take medical history into account when determining premium costs. Under the Affordable Care Act, these practices are no longer allowed. For this reason, women and people with costly medical conditions may see their health insurance premiums go down.
Experts have made plenty of predictions about how the Affordable Care Act's mandates will affect health insurance premiums. However, these predictions won't be proven until hard data is released about 2014's health insurance costs. If you want to positively affect your health insurance premiums for the upcoming year, be sure to avoid tobacco use and investigate any subsidies available to you.
- Age, location, family size and any tobacco use will affect your insurance premium costs.
- The type of plan you choose and any health insurance subsidies will also affect your healthcare premiums.
- Insurance companies can no longer charge women more for health insurance.
- People with costly medical conditions cannot be charged more for coverage.