When you are new to the health insurance world, you might not know what to expect in the way of health insurance quotes. The rates vary from one company to the next and from one plan to the next. While it is impossible to know exactly where your specific insurance quote will be priced, there are ways to know the ballpark that you will be in.
How Has PPACA Affected Insurance Quotes?
When the Patient Protection and Affordable Care Act (PPACA), also known as Obamacare, was passed, the law established health insurance exchanges. These exchanges are online marketplaces where individuals can easily comparison shop for plans and premiums to find the right medical insurance for them. The idea is that these exchanges will bring about competition amongst health insurers. While that may or may not be the case (health insurers already were in competition with each other), with prices displayed right next to each other, it stands to reason that increased competition will bring down premiums.
PPACA also established the Minimum Loss Ratio (MLR). Health insurance companies are now required to pay out in claims at least 80% of the premiums they collect. The other 20% goes to administrative costs, fees, taxes, profit, etc. If the MLR is below 80%, the insurance company must pay a rebate to its subscribers. The 80% MLR rule has kept premiums lower than they would have been otherwise.
PPACA also requires large renewal increases to be approved by the government. This keeps insurance quotes from skyrocketing faster than needed.
Insurance Quotes are Affected by Age
As you might expect, a medical insurance premium is dependent upon the age of the applicant. In general, older people require more medical services than young people. Of course that isn’t always the case (some 80 year olds are in perfect health while 25 year olds have chronic conditions), but insurance risk tables are based on large populations. Because older people have more claims, they must pay larger premiums. Since young people typically have less claims, their premiums are lower.
However, the spread between the lowest age-banded premium and highest age-banded premium is not as large as it used to be. PPACA sets a limit on how much more the highest age-based premium can be compared to the lowest age-based premium. Because of this, it is expected that the insurance quotes that young people receive will be higher than usual since they will be subsidizing the cost of the health care for the older population.
Insurance Quotes are Affected by Plan Design
The plan design that you choose (deductible, coinsurance, copays, etc.) has a direct relationship to the insurance quote that you receive. If you take on more out of pocket responsibility, you will receive a quote that is lower than if you choose a plan will less out of pocket responsibility. It all depends on if you are willing to take a chance on not having a large medical claim.
The best way to find out what your insurance quotes will be is to just go and fill out an application. It does not bind you to anything and doesn’t take too much time. Once you do that, you will get some quotes and be on your way towards covering your health care needs.