Health Insurance Companies Vary Greatly In Price
Health insurance companies vary a great deal for the same plan in the same area. The reason has to do with other factors besides the cost of health care in your area. The company may have experienced an abundance of claims the previous year and now has to make up for the unexpected shortage. The increase in claims might be nationwide or simply for your area.
Health insurance companies also have expenses in operating the health plans they offer. While consumer expenses, such as advertising, claims to handle, customer service and expenses related to producing the premium amount and policies vary, the expenses of overhead also are quite different.
A company that cuts the expense to the bone doesn’t build a new building for offices every five years and keeps upper management fringe benefits and salaries lower might be able to offer you a lower premium. Every company has an overhead expense, it’s part of being in business. However, not every company offers lavish bonuses and trips for their executives, some keep the costs lower and because of that, they can offer lower premiums.
Companies also invest the excess premiums they don’t use for quick claim settlement and expenses. Insurance companies are better than average investors are. They seldom if ever have a losing year. However, some years offer better results than others do. They invest carefully with a majority of the money in government bonds and other safe investments and governmental agencies monitor them to make certain they have prudent modes of investing and lower risk factors. However, not all investment professionals for insurance companies produce the same results. Those who are investment savvy is better than others often have a higher return and those health insurance companies can offer lower prices on their policies because their profits help to defray the premium costs.
The rising cost of medical care also plays a significant role in the cost of health insurance. If a doctor visit goes up by one dollar, it doesn’t seem like much to the average consumer. However, when you multiply that times the thousands of visits from policyholders each year, you begin to understand why insurance premiums increase. It’s not just doctor visits but also the cost of tests, hospital stays and other medical needs that affect the rates and what health insurance compas must charge to stay in business.
In orderings to find the best health insurance company, you must first look at how well they pay claims. While there are many state Department of Insurance sites that offer a section to view company complaints, the easiest way is to ask your doctor’s office who pays the best and quickest. The clerical staff at the office knows the companies that drag their feet on claims making the insured look bad or requiring them to pay before the claim goes to court. They also know the companies they love to handle. These health insurance companies offer good service for both the client and the service provider, the doctor. Often, simply knowing that information can help you make a final decision on the health insurance company you select to be your carrier.