What Affects My Insurance Rate?

Your health insurance premium amount isn’t random. A variety of factors affect how much you’ll pay every month for your coverage.

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The 80/20 Rule

Have you heard about the “Medical Loss Ratio”? This ACA (Affordable Care Act) provision is called the 80/20 rule and keeps your insurer from bringing in high profits from high premiums.

How Are Health Insurance Premium Rates Determined?

Insurance Companies Can’t Gouge the Insured

The 80/20 rule states that a health insurance company must spend at least 80 percent of the money they bring in from premiums on actual healthcare costs/claims and activities to improve the quality of care. Twenty percent of the money they bring in from premiums can be used for administrative costs, marketing, and other overhead expenses. If they’re selling policies to a large group of more than 50 employees, 85 percent of premiums must be spent on care and quality improvement.

If your health insurance company doesn’t meet these requirements, then you will get some of your premium back in the form of a rebate. Rebates happen regularly. Not every year and not every insurance carrier, but in general, you may have one or more insurance companies needing to give back to their members, all because of this “Medical Loss Ratio”.

Factors That Do Affect Your Premium

Under the ACA, there are only a handful of things that can affect your health insurance premium. The state you live in can limit how much these factors affect your premium. If you’re purchasing an individual plan, only your age and zip code affects your premium. However, if your coverage is through your employer, the health insurance company bases premiums on the information for the entire group.

A list of what can affect your premium is below:


The older you are, the more likely you are to file a health insurance claim. This makes you potentially “more costly” for your insurer, and your premium will reflect that.

Tobacco Use

Need another reason to kick the habit? If you use tobacco, your health insurance company can charge you up to 50 percent more than someone who doesn’t use tobacco.


In Las Vegas, Nevada, you may pay a higher premium than someone in other areas of the country for the same coverage. In Clark County, your rates may be lower than some rural Nevada counties, it all depends though. This is because the cost of living in your area, the total number of members you have in your county, fewer members can make the premiums higher, also state, and local rules, and differences in competition. These all have a big effect on your premium.

Individual vs Family Enrollment

When enrolling in a family plan, it is going to be more expensive to insure four people rather than one person. A plan that covers you, your spouse, and/or your dependents will cost more than an individual health insurance plan that covers only you. Insurance companies do not charge after the 3rd child. So, child 4 + costs $0 more.

Plan Category

Some plans come with a high premium but provide outstanding coverage. Other plans have low premiums but higher deductibles and out-of-pocket costs. A “Gold” plan will cost more than a “Silver” plan because generally the Gold plan has a lower deductible. A Silver plan will cost more than a “Bronze” plan because the Silver plan generally has a lower deductible.

Factors that Cannot Affect Your Premium

Gone are the days that a health insurance company could charge you high premiums just because you have a pre-existing condition, if you were a female of child-bearing age, or a male closer to retirement. The ACA does not allow health insurance companies to take your current health status or your medical history into account when calculating your premium. Health insurance companies cannot charge men and women different prices for the same plan.

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Here at Nevada Insurance Enrollment We Can Help!

Picking the right health insurance plan for your needs and budget is a challenge, and too much or too little coverage can cost you. Our health insurance agents are here to help you choose the health insurance plan that fits you and your budget. Give us a call to get started.

Related Articles:

Health Insurance, Vision Insurance or Both?

Buying Health Insurance With A Pre-existing Condition

Things Potentially NOT Covered By Your Health Insurance

How To Get The Most Out Of Your Health Insurance Plan


Read More: Health Insurance in Las Vegas, Nevada


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