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Why do my health insurance rates keep going up? Consumer Q&A

By on April 29th, 2011
Filed: Advice, Facts, Health Insurance

What happens to your auto insurance rates if you get into a car accident and you’re the one at fault? That’s right, your rates go up. There’s a relationship between your utilization of your coverage and your insurance premium. Conversely, if you don’t get into any accidents and never use your auto insurance, you don’t expect them to raise your rates much each year.

Now swap out car insurance for individual health insurance and you might be forgiven for imagining that how much you personally use your health insurance has something to do with how your personal monthly premiums go up or down each year.

We recently answered a question on Yahoo Answers from someone confused on that point. Every year, he said, his insurance company raised his rates between $10-$20. He only saw the doctor once or twice each year, he said, so why do they keep raising his rates? And what could he do about it?

Here’s the eHealthInsurance answer:

Rate increases for health insurance have nothing to do with how much you see the doctor or use your coverage.

If your rates are only being raised $10-$20 a year, then I’m afraid you’re better off than many people. According to a study by the Kaiser Family Foundation, average health insurance rates for many people have doubled in the past 12 years. Insurance premiums are periodically raised by all health insurance companies – typically due to the increased cost of medical care. If you age into a different age-band (maybe, for example, when you turn 25 or 30, 45, 50, etc…) that can also trigger a rate increase.

If you get your coverage through an employer, you can ask your employer to explain the rate increases and ask if they have any more affordable group health insurance options for you.

If you buy coverage on your own and find that you can no longer afford the plan you have, then work with a licensed agent (online or off) to see what other plans may be available in your area. Work with an agent that represents multiple insurers to get the best view. It doesn’t cost anything extra to work with an agent. You may be able to find another plan that covers the benefits you need for a lower monthly premium. Just be sure not to cancel your current coverage until you’re officially approved for a new plan.

Photo via Flickr user DorkyMum.

About Douglas Dalrymple

Doug Dalrymple is a member of the communications team at eHealth, Inc. and has worked in the health insurance and technology industries for fifteen years. He works on communications strategy, content creation and management, project management, and corporate messaging.

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