Health insurance is one of the most important products in your financial portfolio. It safeguards you financially in the face of a medical contingency. It covers the costs of the intensive care unit, hospital room rent, medications, surgical procedures, and consultation fees. However, the premium for health insurance, like any other product in the market, is subject to regular revisions. Are you wondering if the health insurance premium will rise in 2023? Let’s find out.
Will health insurance premiums increase in 2023?
According to industry experts, health insurance premiums are likely to rise as a result of the global economic downturn and rising interest rates. Inflation is another crucial factor that determines health insurance premiums. Health insurance companies raise premiums every year due to medical advancements and the rising cost of treating even minor illnesses. Furthermore, increased hospitalisations since the advent of the COVID-19 pandemic have amplified the financial burden on insurers, compelling them to raise the premium in 2023.
Other factors affecting health insurance premiums are:
Age
Your age plays a significant role in determining your health insurance premium. Younger individuals are considered low-risk. Therefore, their premium is lower compared to older individuals. As you age, the likelihood of developing health problems increases, making you a higher risk for insurance companies. That is why your premium may increase as you get older. Additionally, older individuals may require more frequent medical check-ups, which can also drive up the cost of insurance.
Medical history
Insurance companies use information about your past and current health conditions to calculate the risk of future medical costs. Your premium is likely to be higher if you have a history of chronic medical conditions, hospitalisations, or other serious health issues. On the other hand, if you have a relatively clean health history, your premium will likely be lower.
Lifestyle
Insurance companies consider factors such as your occupation, tobacco use, alcohol consumption, exercise habits, and diet when determining your premium. For example, individuals who use tobacco or have a high-risk job may have to pay a higher premium as these factors increase the likelihood of future medical costs. Conversely, individuals who engage in healthy lifestyle habits such as regular exercise and a balanced diet may have to pay a lower premium as they are less likely to require medical treatment in the future.
Deductible
The deductible is the amount you pay out of pocket before your insurance coverage kicks in. A higher deductible can lower your premium, while a lower deductible will increase your premium.
Occupation
If you are into a physically demanding job, say if you work on a construction site or mineral mines, the likelihood of getting injured is high. Due to this, the premium will also be higher. On the contrary, if you work in the administration department of a school or in any other job where there is little stress or physical involvement, your premium will be lower.
Geographical location
Your place of residence is another crucial consideration. If you live in an area where pollution levels are extremely high, you cannot find healthy food, or the climatic conditions are unsuitable for living, your premium will be higher. The reason is living in such areas exposes you to a variety of health issues.
Type of plan
There are several types of health insurance plans available in the market—group health coverage, family floater plans, and individual policies. If you choose to enrol in group insurance, your premium will be lower than if you chose an individual plan. However, group insurance will provide you with limited coverage and customisation. Additionally, the number of riders you choose also raises the premium amount.
Final words
Health insurance premiums are likely to rise in 2023. However, keep in mind that premiums for different individuals vary due to the aforementioned factors. When buying a policy, remember to use the health insurance premium calculator to determine how much you will have to pay to financially protect yourself and your family during medical emergencies.
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