In the most basic sense, health insurance premiums refer to the amount of money one pays for a certain insurance policy. Usually, different insurance policies carry different premiums. Further, various insurers have different premiums.
Typically, insurers first determine whether or not you are eligible for insurance cover. Further, the insurer will look at your historical medical data for any red flags. The company then compares the results from the data review with their benchmarks.
Insurance benchmarks are usually specific to a company. They are essential when determining the value of insurance premiums one should pay. For this reason, premiums for every company differ. These benchmarks rely on specific factors. This is to say that the factors affect health insurance premiums. Below are some of the factors.
- Pre-existing Medical Conditions
Usually, pre-existing medical conditions attract high costs in terms of premiums. Unfortunately, many insurance companies do not cover certain conditions.
In Singapore, the Ministry of Health (MOH) categorises the conditions broadly. They include most types of cancer, blood disorders, degenerative diseases and so on. Interestingly, even MediShield Life insurance demands higher premiums for people with pre-existing conditions.
In particular, MediShield covers patients with pre-existing conditions if they pay 30% additional premiums for the first 10 years. After this period, a policyholder can start paying at the standard premium rate.
Old people are considered fragile of body and health. It is easy to suffer chronic diseases with the diminished immune system of old age. As a result, old customers have a higher risk premium compared to younger customers. Therefore, aged policyholders usually pay very high premiums.
Interestingly, Singapore has an additional health insurance cover for old people apart from MediShield Life insurance. In particular, old Singaporeans now have to subscribe to the ElderShield insurance cover in addition to MediShield.
- Family History
Insurers always insist that potential policyholders give comprehensive information about their background. This must include family medical history. In particular, such information is crucial in helping the insurer understand if there is a family genetic medical condition.
In some cases, some insurers might demand genetic test results to establish if one is in danger of any disorder.
Insurers are usually careful about such cases because they cost a lot in underwriting costs. If they establish that a potential or existing policyholder is at risk, the insurance premiums significantly rise.
Usually, insurance companies consider female sex prone to more health issues than men. Therefore, they typically charge higher premiums for their insurance.
Interestingly, CareShield, the proposed successor of ElderShield attracted uproar because of higher premiums for females. However, MOH contested that women live for longer hence may suffer old age disabilities for more extended periods. Therefore, the higher premiums are for covering the “extra” period that they live.
However, other insurers argue that women end to attend more doctor sessions than men due to their natural makeup. Further, the higher premiums for women cover periods of pregnancy in which they are highly susceptible to ailments.
Interestingly, lifestyle is among the significant factors that affect the price of health insurance premiums. There are a lot of diseases and conditions that arise out of poor lifestyles. For instance, insurers always consider whether a potential policyholder uses substances like tobacco or alcohol.
Further, insurers consider eating lifestyles that cause high body mass index (BMI). Typically, people with higher BMI are highly susceptible to medical conditions like joint problems. Therefore, such poor lifestyles lead to higher health insurance premiums. This is to say that in a way, policyholders can influence the price of the premiums they pay.