What Factors Affect Your Health Insurance Premium?

Posted on

Between life choices and coverage options there are a few factors that will have a very direct impact on the monthly premium you pay for health insurance. By understanding what you can do personally to save on your monthly premium you'll be able to customize your coverage and your cost to better fit your budget. Be aware though, if you change your coverage you may find yourself paying more for care in the future.

The Added Cost of Smoking

For decades now we've heard about the health impact of tobacco use, and this really comes home to roost when you shop for health insurance. Though it can vary by state, current federal laws allow insurance companies to increase the premiums on policies covering tobacco users by up to 50%. Even if you're buying insurance through a state or federal exchange, that additional surcharge can price many people right out of affording the insurance they need.

In order to help combat the cost, lower health care expenditures, and improve your well-being, there are tobacco cessation options available. These are included as a preventative service on all policies started after September 23, 2010, making the cost 100% covered. Contact your specific insurance provider to find out how to take advantage of this preventative care coverage, and what stop-smoking aides it applies to.

Adjusting Your Coverage Levels

Your deductible and coverage levels will have a direct impact on your monthly premium, but not as drastic as the removal of the tobacco surcharge. This can be a challenging decision to make though, so take some time to really consider just how frequently you'll use your insurance for something other than preventative services. This can include, but isn't limited to, doctor visits outside your annual exams, ER visits, hospital stays, surgeries, and any elective procedures.

One of the most effective ways to lower your premium is to increase your deductible, which can reduce the price you pay each month by a considerable amount. The downside comes when you actually need to use non-preventative services. While your policy may include cost savings benefits, such as maximum allowable charges, you'll be responsible for that full amount until you meet your deductible, so make these adjustments with care.

If you're a non-smoker, using your insurance infrequently, then a higher deductible paired with higher overall coverage can end up saving you money. If you're a regular at your doctor's office or the hospital you'll want a lower deductible, and slightly lower coverage percentage. In the end, it's best to speak with a representative of your insurer to do your best to customize your coverage to fit your needs.

Contact a company such as David Paulson Agency Inc. to learn more.