Why Does Health Insurance Premium Cost Vary Between People?

Mar 2, 2018

retail healthcare

At an age where medical costs have skyrocketed, it is almost impossible to afford healthcare without insurance. In the US alone, a visit to the physician could set you back about $100, with the cost of a bypass surgery going as high as $75,000 without insurance, which is more than the per capita income of the nation. As a result, people not only in the US but also all across the globe have opted for medical insurance. However, the health insurance premium costs vary widely from people to people and region to region. The health insurance premium paid by an individual can range from a few hundred dollars a month to nearly a thousand dollars. The difference in health insurance premium is due to multiple factors. Additionally, each health insurance company uses a set of various standards and assumptions to calculate the premium.

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Premium prices are usually lower for younger individuals and gradually increases as people grow older. It is because young people have fewer diagnosed and undiagnosed health problems and older people are more susceptible to age-related diseases.

For instance, in 2017, average monthly premiums for individual plans by age group were:

  • $152 for people under age 18
  • $177 for people age 18-24
  • $239 for people age 25-34
  • $303 for people age 35-44
  • $400 for people age 45-54
  • $580 for people age 55-64


Health insurance premium costs for women are slightly higher than for men as they are more likely to go to the doctor regularly, take prescriptions, and be subject to certain chronic disease. The other reason why women pay a higher premium is due to maternity insurance, which can cost thousands of dollars.

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Body mass index (BMI)

BMI is a health indicator, which is used by healthcare professionals to categorize people as underweight, normal weight, overweight, and obese. People with high BMI have significantly higher health insurance premiums than those with normal BMI. The higher premiums are because people with a high BMI have higher chances of suffering from diseases like diabetes, heart and joint problem, and sleep apnea.

Tobacco use

Insurance companies penalize people who smoke cigarettes or chew tobacco by charging higher premiums or refusing to provide them with coverage. It also includes people who have consumed tobacco in the past as it can take a long time for people to recover from lifetime use of tobacco. Studies have frequently linked tobacco use with the risk of cancer and other ailments. As a result, people who use tobacco end up paying a higher premium.

Pre-existing medical conditions

Many insurance companies don’t sell insurance to people who have specific pre-existing conditions as they know it can be costly. It is also likely that the policyholder may have additional issues related to the pre-existing condition.

Family history

Health insurance companies charge a higher premium for applicants who have a family history of certain medical condition or ailments. The higher premium is due to certain diseases being hereditary in nature including heart disease, high blood pressure, arthritis, diabetes, and cancer.

Zip code

The location and region of the customer also matters when they avail health insurance. The variation is mostly due to shared climate, healthy food option, and cultural aversion to exercise. Mostly, health insurance companies detect a pattern of similar risk profiles among people who live in the same area. The premium here doesn’t vary on an individual level, but the charges will vary as per the region. Additionally, insurance companies also factor in the cost of complying with local laws into the insurance premium.

To know more about factors affecting health insurance premium costs, request more information from our industry experts.


Profession is another factor that affects the health insurance costs. The insurance premium costs rise for people who work in more dangerous jobs that involves exposure to hazardous chemicals or radiation and work with high injury rates. Additionally, many insurance companies are opting to charge a higher premium for people who have incredibly sedentary jobs, which requires them to sit in one place all day. Such people have an increased risk for cardiovascular diseases.

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