Calculating Health Insurance
A health insurance should be able to cover your medical expenses. There are two type of health insurance, individual or group insurance. An individual health insurance is paid by the policy holder personally. Group insurance is provided by employers.
The amount an individual pays for health insurance depends on different factors. These factors are: age, medical condition, height, weight, marital status, preexisting conditions, and type of plan. Most policy holders give more or less importance on these factors, there are several basic principles that need to be applied in setting medical insurance premium, and nearly all are based on risk.
As you know, healthier and younger people pay lesser premium. Married couples and those who are proportionate in height and weight are given lesser premiums to pay as well. The complex part in health insurance is choosing the right medical plan that will suit you and your family. It should be able to meet both your health needs and financial capabilities.
A medical insurance that gives importance to patient’s choice is called the indemnity plans. It is also known as a fee for service plans. The patient is given the responsibility to choose and gets immediate care. It has a comprehensive coverage, with a lot of management and control from the side of the insured. Since policy holders are given more control of their coverage, they need to pay a much greater amount than that of managed care plans. Managed care plans emphasizes on preventive care. They are of much lesser premium, and rates are negotiated by the insurance company.
Group Insurance is insurance policies provided by employers to its employees. Employees who are working for a smaller company, pays a different premium than those who work for a larger company. In a group plan, premium is calculated based on all the people being covered by the policy. It’s not only your health that you have to worry about; you have to worry about your colleagues’ health as well.
A company generally takes quotations from different insurance companies. The insurance company will then compute the risk, based on different given factors that a workforce may represent. Group plans, however, are less expensive compared to individual plans. This is because the risk has been spread over different insurers.
Some factors that an insurance company takes into consideration are age, location, work industry and previous company claims. Kaplan says, that companies who have employees with an age range of 40s to 50s, chances are the premium will be higher. There is a risk that comes with old age. If a company hires recent college graduates, chances are premiums will be lower.
A company’s previous claims will be taken into consideration. If a company has more male employees premiums will be higher. It is said that men are more prone to cancer, hypertension, diabetes and heart attack. On the other hand, if a company has more women with an age range from 20s to 30s, premiums will be higher because of maternity and child care costs.
Location and work industry are also considered factors. Hospitals in different towns and states have higher bills compared to others. As for work industry, type of work also counts. Others have a higher rate of claims than the others. Kaplan says, teachers, nurses and construction workers have the tendency to file more claims than others.
There are a lot of factors to be considered in calculating the premium for each person. Whether you take an individual or group insurance is up to you.