How Are Health Insurance Premium Rates Determined?

LAS VEGAS - Nov. 16, 2021 - PRLog -- Your health insurance premium amount isn't random. A variety of factors affect how much you'll pay every month for your coverage.

The 80/20 Rule
Have you heard about the "Medical Loss Ratio"? This ACA (Affordable Care Act) provision is called the 80/20 rule and keeps your insurer from bringing in high profits from high premiums.

Insurance Companies Can't Gouge the Insured
The 80/20 rule states that a health insurance company must spend at least 80 percent of the money they bring in from premiums on healthcare costs and activities to improve the quality of care. Twenty percent of the money they bring in from premiums can be used for administrative costs, marketing, and other overhead expenses. If they're selling policies to a large group of more than 50 employees, 85 percent of premiums must be spent on care and quality improvement.

If your health insurance company doesn't meet these requirements, then you will get some of your premium back in the form of a rebate.

Factors That Do Affect Your Premium
Under the ACA, there are only a handful of things that can affect your health insurance premium. The state you live in can limit how much these factors affect your premium. If you're purchasing an individual plan, only your age and zip code affects your premium. However, if your coverage is through your employer, the health insurance company bases premiums on the information for the entire group.

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Nevada Insurance Enrollment
4260 W. Craig Road suite #150-A
North Las Vegas, NV 89032

(702) 898-0554
Website: NevadaInsuranceEnrollment.com