In the last few decades, health insurance premiums have stupendously risen across the United States. Earlier health insurance was priced based on several factors but after the launch of the Affordable Care Act factors that impacted health insurance costs has significantly reduced. Americans pay different premiums, though these premiums are not determined by health conditions or gender of the insured. Thanks to the Affordable Care Act, premium is determined by lots of other factors. There are several factors that contribute to the health insurance premiums price like state and federal laws regulating costs, age of the person seeking health insurance, area where the person lives, whether person is getting insurance through employer, type of plan, number of people who will be insured, smoking and tobacco use along with some other factors.
Factors that Affect Health Insurance Premiums
There are several factors that decide the health insurance premiums and these factors are not within one control. Nevertheless, it is always better to have a clear understanding of all the factors that affect health insurance premium costs. Some of the factors are discussed below:
The age of the person seeking the health plan.
Health insurance premiums vary depending upon state and federal laws that ensure what health insurance should cover and how much health insurance carriers can charge.
The state in which the person seeking insurance is residing.
Health insurance premiums are generally lower in urban areas so people residing in urban areas pay less premium compared to people residing in rural areas, who pay more premium amount.
In an employer-sponsored health plan, low wage workers have to pay more premium amount compared to exchange-based plans, because exchange-based health plans offered them subsidies.
Employees of bigger companies generally have cheaper premiums, so the size of the employer also determines the premium cost.
The county in which one resides, Counties having more health insurance plans have more competition so the premium amount is relatively cheaper than counties having only one plan.
The type of health plan one chooses, as all health plans come with a different price tag and different monthly premium.
Whether Individuals are getting health insurance through their employer or they are buying it themselves. The premium amount will be different if one is getting insurance through employer and if they are buying it on their own.
Whether the person smoke or use tobacco or not. For a person who smoke and uses tobacco premium rate will be higher.
Monthly & Annual Health Insurance Rates by State for a 40-year-old applicant
|State||Monthly cost||Annual cost|
From the above tabular representation it can be understood health insurance vary greatly depending on the area where one lives. It is clear the for Wyoming residents, health insurance premiums are 50% more expensive than the national average premium cost.
Average health Insurance Premium Rate by Metal Tier
Health insurance plans in US are categorized under different metal tiers such as Platinum, Gold, Silver, and Bronze. Each tier refer to a different value level or portion of insured medical cost that they have to pay along with their premiums. High-value plans cover huge portion of medical bills leaving insured with the lowest out-of-pocket costs.
Bronze plans cover the smallest proportion of medical bills and come with highest deductibles, copays, and coinsurance whereas Platinum plans offer the maximum coverage amount, as it is expected to cover 90% of all costs. The Platinum plans are the most expensive plans and Bronze plansare the cheapest. The table below illustrates the average premium rate paid for individual health insurance based on plans in the different tiers.
|Type||Monthly premium||Annual premium|
Average Health Insurance premium Rates by Plan Types
Health insurance premium rates change depending upon the type of network use by the plans. Depending on HMO, PPO, EPO or POS plan, members of these plans will have access to the health care providers managed in different ways and even the rate of premium varies. The table below show the monthly and annual health insurance rates by plan type.
|Type||Monthly rate||Annual rate|