Health Insurance Articles

What Factors Affect Health Insurance Premiums?

2009-11-09

With the economy continuing to struggle, and with unemployment rates still soaring, people are taking a closer look at their monthly expenses. This includes the amount of money they are spending each month for health insurance. Health insurance can be a significant expense to those consumers who don't get insurance through their employers. Fortunately, consumers can take steps to reduce the health insurance premium they are paying. Doing so requires some simple research and common sense moves: Consumers can cut their health insurance costs by making lifestyle changes and by tinkering with their health insurance policies. It may seem like a lot of work, but it will pay off in the form of lower monthly bills.

The first step for consumers looking to reduce their health care costs is the most important one of all: They need to live a healthy lifestyle. Health insurance companies charge consumers higher monthly premiums if they fall into certain categories. Smokers, for instance, can expect to pay more for their health insurance. Overweight or obese people can expect to pay higher health insurance premiums each month, too. The same is true for anyone with high blood pressure or any pre-existing medical conditions. This is one way for health insurance providers to protect themselves. They charge high-risk clients higher premiums because these clients are more likely to require higher and more frequent medical care during their lifetimes. Consumers who want to avoid these higher fees, then, should take steps to lower their weight, stop smoking and lower their blood pressure.

But living a healthy lifestyle, as important as it is, is only one step toward reducing health care costs. Consumers can also adjust their health insurance policies to reduce their monthly premium costs. For instance, if consumers raise their deductibles - the amount of money they have to pay before their health insurance providers cover the rest of whatever medical procedure they are having - they will lower their monthly premiums. Consumers taking this option should be careful, though. They don't want to set their deductible so high that they will struggle paying it in case of a medical emergency. Consumers should take a look, too, at whether their insurance policy comes with any annual or "out-of-pocket" limits. This is the maximum amount of deductible or co-payments that consumers will have to pay each year. If that number is low, the consumer's monthly insurance premium will generally be higher.

Consumers hoping to cut their health insurance premiums need to study their policies carefully and make wiser health care decisions. But this work will pay off in significant savings each year. In today's economy, that's good news.