There are many factors that affect what the health insurance company will charge you. Perhaps it would be helpful to you to learn about those factors, so that you can understand the quotes you are getting.
Whatever you do, please work with an experienced agent. He can explain how this works and help you to understand the different terms and how the factors affect your quote. There is no cost to you to use a good agent and he can make the shopping experience less stressful.
Let’s go through the different factors now:
Age: As you might guess, the younger you are, the less you have to pay for health insurance. Why? Because generally speaking, younger people are healthier than older people. As we age, different and various illnesses show up.
Perhaps you are eating too well and you develop type 2 diabetes. Maybe you don’t get the exercise you should. Certainly, you will agree, that younger people are usually healthier than older people.
Gender: Males are much less complicated than women. This is said, tongue in cheek, but you might also agree. Just take the annual physical for example. A woman needs an OBGYN exam, a mamagram, pap smear along with all the other blood tests to determine if she is well. Men usually will have blood tests and a cancer screening PSA test.
Psychologically, women tend to use medical services much more than men, also. A typical man feels invulnerable and won’t go to the doctor unless he is really sick. I know, this is generalization, but it is frequently true!
Health history: How healthy have you been? Are you the right weight for your height and gender? Have you developed a condition such as elevated blood pressure or elevated cholesterol? Our human body is extremely complex and so many things can go wrong.
Healthy individuals will get a lower premium quote because the health insurance company in NC extrapolates your health into the future. That means, a healthy person will likely remain healthy. A person with many health challenges, will have those challenges or more in the future.
Exercise: People who exercise typically have fewer problems with their weight. They have less susceptibility to insulin resistance – type 2 diabetes. They have fewer health problems of any kind.
The recommended minimum amount of exercise for Blue Cross Blue Shield of North Carolina is twenty minutes of exercise for three times per week. Obviously, you can exercise more than this, but if you do at leas this amount, it will be beneficial.
Whether already insured: If you have been covered by a health plan for years, the new insurance company interested in insuring you is less worried.
Certainly, if you have been under a doctor’s care, it is less likely that you will develop an undiagnosed condition that the new insurance company would be responsible for.
Perhaps the most difficult person to insure is one who has never had a family doctor. He may think that he is very healthy because he has not needed to see a medical person.
However, there may be some condition that has been developing over the years that he is unaware of. That is why health insurance companies are happier if they need to insure someone who has had continual health coverage.
Type of plan chosen: If you choose a relatively new type of plan called a high deductible health plan, and use it in conjunction with a health savings account, you will definitely save money.
The HSA type plan costs you less each month in premium amount. It costs about $60 for a doctor sick visit, but you are likely to save thousands of dollars each year on premiums.
In addition, if you have a high deductible health plan, you can open up a health savings account at your local bank.
Money that you deposit into your health savings account can be used for any medical expense…and importantly, that money is not taxed! Money that isn’t taxed means that you save about 40% in taxes.
By the way, if you don’t spend all your savings in any year, it doesn’t matter. It doesn’t go away like in a flexible spending account. This savings money is yours, like an IRA, and it will be there to help you pay your medical expenses. At the age 65, you can take the money out of your account and use it for anything you’d like…finally though, you will have to pay taxes on the money.
However, if you spend it on medical expenses, you will never pay the income tax. Great sound to that eh?
Deductible chosen: If you choose a high deductible plan, the insurance provider will not charge you as much of a penalty, called a “rate up”.
A rate up is extra premium that that require because you may be on high blood pressure medicine, for example. That rate up takes into consideration that you will need medication for the rest of your life, most likely.
If you choose a high deductible plan, they calculate that you are willing to take on more risk. Therefore, the insurance company doesn’t have to charge you as much per month. If you are looking to save money, choose a higher deductible plan.
Insurance company: The insurance company that you choose is very important in how you will be charged. Some insurance providers have many subscribers in the state and consequently, they can spread the risk over many, many people.
As an example, BCBSNC, Blue Cross and Blue Shield of North Carolina insures about 90% of the people in NC. Consequently, their rates are more stable and they aren’t affected by pockets of the state that my turn up to be less healthy.
The insurance company is important in being able to see the doctor of your choice and go to whichever hospital you need to go to.
Because an insurance company has great penetration in a state, means that virtually all the doctors and all the hospitals will participate as a health provider. That’s good for you because you have better choices.
Health Insurance Agent: A good agent who specializes in health insurance can provide you with a depth of knowledge about the plans that might fit you best. Another way the agent can help is interpreting how to answer the questions.
Many times, people read something into the question that isn’t there, and answer it improperly. You don’t want to answer a question that wasn’t asked. Read it carefully and then ask your agent his opinion about what it means. The agent is paid a commission by the insurance company – not the insured. So use an agent who is a specialist.
What other factors can you think of that I haven’t listed here? Have you had an experience that would tend to disagree with what I have written? Let me know if you think this article was helpful.