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Many factors affect the cost of individual health insurance, including one's occupation, age, locale, general health history, and the benefits, exclusions, and deductibles associated with the individual health insurance plan. The factors affecting the cost are similar to the factors that influence the cost of group health insurance. Additionally, other external factors affect health insurance premiums, such as medical costs, the cost of complying with regulations, and the company's overall operating costs.
An insurance company may use one's occupation as a determinant when calculating the premium based on the risk factor of the occupation. For example, an applicant in a high-risk field may have to pay higher premiums than an applicant in a relatively low-risk field. Insurance companies employ risk assessors and use computer algorithms to determine premiums.
An applicant's locale or geography has a similar effect as one's occupation. For example, if residents of a particular area have a higher likelihood of developing illnesses caused by environmental problems, such as air pollution, then everyone in the area may have to pay a higher premium. Applicants' general health also gives insurance companies an idea of the long-term costs associated with providing health care.
A relatively healthy person is likely to cost the company less money than an unhealthy person, which usually results in a premium difference. A person's medical history is also factored in when determining the cost of individual health insurance. If an applicant has a history of illnesses, the premium may be slightly higher. Other factors, such as pre-existing conditions that require immediate treatment and coverage, are also considered in the health plan cost.
Health insurance companies often charge higher premiums for individuals with pre-existing conditions. Usually, this higher charge is partly due to the anticipation that they will pay more overall for that patient's medical care. If someone is looking for coverage and has a pre-existing health condition, they will likely have a more extensive health support team. As such, there will be more people for the healthcare company to pay, such as surgeons, physical therapists, certified nutritionists, and other specialists.
One of the most important factors that determines the cost of individual health insurance is the level of the health plan. A health plan that covers fewer items, or has relatively low caps, will likely have a lower premium than a healthcare plan that covers more and has higher limits. Additionally, the plan's deductible or co-pay cost also plays a factor in the cost of individual health insurance.