If you look closely at your own personal health insurance rates, you'll probably notice that over a length of time they are quite likely to go up. You may already know that health insurance premiums tend to increase over time, but these jumps in cost can present a significant financial strain for somebody who is on a tight budget. In order to best understand when your rates will increase in the future, it is important to spend some time learning about how medical insurance rates are calculated and why they sometimes go up.
While a lot of us notice our insurance rates going up, we very rarely, if ever, see them going down. Premiums very rarely fall. Like any other business, the health care industry is profoundly affected by inflation. As the cost of living rises, the cost of medical care rises with it. This means that insurance companies are forced to raise their rates to avoid losing money.
Another reason why you may find yourself paying more for medical coverage is that you are costing your insurance company money. The more claims you make, the more money the company needs to spend on you. This makes you, to some extent, a financial liability. So if you make claims often your company will raise your rates. Because of this fact, the same individuals who need medical insurance the most are the ones who often wind up straining to make their monthly payments after a sudden increase in their insurance rates.
To protect themselves, insurance companies usually offer higher rates to different people based on the frequency of which those customers are likely to make claims. This is why individuals with chronic conditions like asthma, vision problems, or diabetes will probably have higher rates than people without similar afflictions. Additionally it is the reason why people who smoke and are therefore more likely to have smoking- related health problems, have higher insurance premiums than most non- smokers.
These are some of the major reasons why you may be paying higher insurance rates.