What affects your health insurance premium?
The main five factors that affect your health insurance premium are location, age, tobacco use, plan category, and plan dependents. Let’s break down each factor.
Location
Different municipal and state laws will affect your health insurance premium in your area, also just like how rent changes by location your health insurance premium changes by location. One study found that the price of a knee replacement surgery ranged from $21,300 to $45,000 in New York City. In comparison, the same procedures in the Bay Area ranged from $47,600 to $74,700 while in Los Angeles the range was from $26,200 to $43,800.
Age
How old you are will greatly affect your health insurance premium. From an economic standpoint, the older you are the more health care services you will use which require a higher premium. The premium of older people can often be three times higher than younger people.
Tobacco Use
The Affordable Care Act (ACA) allows insurance companies to charge up to 50% more for tobacco users vs. non-tobacco users under a tobacco use surcharge. Some states stipulate that insurance companies must charge less than 50%, but most states follow the ACA rule and don’t add any restrictions on the 50%.
Plan Category
Depending on which category of health insurance plan you choose, you will see drastic differences in your premium with bronze being the cheapest and platinum being the most expensive.
Plan Dependents
Lastly, insurers can charge more if you want your plan to also cover your spouse and/or children.
Note: Your health, medical history, or gender can NOT legally affect your premium.
Further Reading:
https://www.nashp.org/wp-content/uploads/2017/06/Health-Care-is-Local1.pdf
https://www.moneycrashers.com/factors-health-insurance-premium-costs/
https://www.healthmarkets.com/content/smoking-and-health-insurance
