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How Marketplace Plans Set Your Health Insurance Premiums

There are six factors that can affect Marketplace plan prices: age, location, income, tobacco use, family size, and plan category. Health status and gender DO NOT affect pricing.


Factors that can affect premium costs

Under the health care law, insurance companies can take into account only five things when setting premium costs.


  1. Age: Older people can be charged up to 3 times more for premiums than younger people.
  2. Geographic location: Where you live has a big effect on your premiums. Competition, local regulation, and cost of living in different areas account for this.
  3. Income: Depending on your income and how many people are on your tax return, you may qualify for a subsidy which would reduce your premiums.
  4. Tobacco Use: Insurers can charge tobacco users up to 50% more than those who don’t use tobacco.
  5. Individual vs. family enrollment: Insurers can charge more for a plan that covers a spouse and/or dependents.
  6. Plan category: Plans are available in four categories: Catastrophic, Bronze, Silver and Gold. The categories reflect how you and the plan share costs. Bronze plans will likely have lower premiums and higher out-of-pocket costs. Gold plans are likely to have the highest premiums and lowest out-of-pocket costs.

All Marketplace health plans cover the same list of essential health benefits. Insurance companies may offer more benefits than the minimum, which could also affect costs.


Factors that can’t affect premiums

  • Insurance companies can’t charge women more than men for the same policy.
  • They also can’t take health status into account when setting rates. All Marketplace policies must cover treatment for pre-existing conditions from the first day coverage begins.

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