When Health Insurers Can Charge You More

When Health Insurers Can Charge You More

During the inaugural enrollment period of the Affordable Care Act (ACA), an estimated 9.3 million previously uninsured Americans obtained healthcare coverage. Whether you’re one of them or among the other millions who had to choose new ACA-compliant insurance plans, you may still be confused about the factors that affect your healthcare premiums. According to Healthcare.gov, there are five factors that influence health insurance plan prices. These include location, age, family size, tobacco use and plan category. We’ll take a closer look at them below.


Where you live is one of the biggest factors affecting your insurance premiums. This is primarily a result of local regulations, cost of living and the number of insurers competing for consumer business in a given area. There may even be significant rate variations within a single state. For example, Kaiser Health News reported last year that a 40-year-old in Philadelphia would need to spend $300 per month on a mid-level insurance plan, 77 percent more than the premium for the same type of coverage in Pittsburgh.


Your age also plays a large role in determining your health insurance premium. Insurers can charge older people up to three times the amount that younger people pay. In the past, some companies charged older individuals significantly more than the 300 percent spread allowed by the new law. For example, an analysis conducted by HealthPocket prior to the ACA rollout found that policies in Delaware, Oregon, Alaska and Wyoming all had average premiums for 63-year-old consumers that were 350 percent higher than those quoted for 23-year-olds were.

Family Size:

Obviously, a plan that covers a spouse or dependents will always cost more than one that is for an individual alone.

Tobacco Use:

While the ACA prevents insurers from factoring individual health status into their premiums or denying coverage for pre-existing conditions, it made a bit of an exception for tobacco. The law allows insurers to charge tobacco users up to 50 percent more for coverage than those who don’t use tobacco must pay. However, a “glitch” in the government’s computer payment system attached to the healthcare marketplace is currently preventing calculation of the tobacco surcharge. Reports say it’s unlikely they will fix it until at least 2015.

Plan Category:

ACA-compliant healthcare plans come in five categories (catastrophic, bronze, silver, gold and platinum) that have variations in the percentage of costs paid by the insurer. While bronze plans have lower premiums, the out-of-pocket costs are higher. Platinum plans, on the other hand, have lower out-of-pocket costs and higher premiums.

The ACA no longer allows insurers to factor gender into their plan premiums. This means women are no longer required to pay higher premiums than men do. The provisions of the ACA protect consumers against “unreasonable” rate increases as well. Any insurance company that wants to raise premiums on non-grandfathered plans 10 percent or more must publicly justify the increase.


If you’re concerned about your health insurance premiums, want to get a head start on choosing a plan for 2015, or are currently uninsured, contact your insurance agent to discuss your coverage options today.