Why Do Health Insurance Rates Differ Between Different Insurance Companies?

When people are looking at various health insurance companies and plans, one thing that often don’t understand is how the quotes they get on similar plans can vary so drastically between different health insurance companies. They think that all the health insurance quotes they receive will be in the same range, and most of the time they are, but sometimes you can get quotes from companies that are double what some others offer you. Why is this?Different Health Insurance Companies

The main reason this happens is because of the specific formulas most health insurance companies use to determine the quotes they will offer their customers. It is a rather standard way of quickly and easily determining what the best quote is a health insurance can offer you. Health insurance companies rarely have time to go through every situation on case by case basis, reviewing all the details and making a decision that way. They just don’t have the manpower to do this.

What they do it take a few specific pieces of information that you provide them, input it into the formula they use, do the calculations and get a quote. Sometimes, a real person reviews the quote after that and makes any necessary adjustments before they send it to you. This rarely happens, though. More often than not, especially when you are buying health insurance on the Internet, everything is done by a script automatically.

But, how does this explain the differences in health insurance quotes?

Well, not every health insurance company uses the same formula – some place more weight on specific factors than others. Many are similar, but they each have their own little intricate differences that can really have an effect on the health insurance quote you receive.

For example, let’s just say that you smoke and ride a motorcycle every day. One health insurance company may not even account for these things in their formula, while others may place a very high weight on these two factors. So, the first insurance company will give you a pretty standard rate, while the others will probably offer you a sky high rate. This is just a very simple, hypothetical example, but it illustrates the point. This is another reason why it is so important to shop around and see what as many health insurance companies can offer you – there is a lot of variation…

In the end, the process that most health insurance companies use to determine your health insurance premium is a rather mechanical process. It’s not like there is an actual person sitting there reviewing your file and making the decision by themselves – more often than not, your information is just put into a predetermined mathematical formula and a number comes out after all the calculations are done. If you want to see how simple this process is, why not input your zip code into the form above, click on the submit button, and see what numbers come out!

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