How Marketplace Plans Set Your Health Insurance Premiums
There are five factors that can affect Marketplace plan prices: location, age, family size, tobacco use, and plan category. Health status and gender DO NOT affect pricing.
Factors that can affect premium costs
Under the health care law, insurance companies can take into account only five things when setting premium costs.
- Age: Older people can be charged up to 3 times more for premiums than younger people.
- Geographic location: Where you live has a big effect on your premiums. Competition, local regulation, and cost of living in different areas account for this.
- Tobacco Use: Insurers can charge tobacco users up to 50% more than those who don’t use tobacco.
- Individual vs. family enrollment: Insurers can charge more for a plan that covers a spouse and/or dependents.
- Plan category: Plans are available in five categories: Bronze, Silver, Gold, Platinum, and catastrophic. The categories reflect how you and the plan share costs. Bronze plans will likely have lower premiums and higher out-of-pocket costs. Platinum plans are likely to have the highest premiums and lowest out-of-pocket costs.
States may limit how much these factors can affect premiums.
All Marketplace health plans cover the same list of essential health benefits. Insurance companies may offer more benefits than the minimum, which could also affect costs.
Factors that can’t affect premiums
- Insurance companies can’t charge women more than men for the same policy.
- They also can’t take health status into account when setting rates. All Marketplace policies must cover treatment for pre-existing conditions from the first day coverage begins.