Cheap health insurance in a privately-based health insurance industry
There are many philosophies on how health insurance should be distributed in a given country. Free-market and government-controlled methods alike provide various benefits and problems that have to be dealt with. With so much controversy in recent years over what strategy is best, we thought we’d help you understand a little about the advantages that the private health insurance industry brings and how it can result in cheap health insurance rates.
The dominant force behind determining insurance rates is the risk factor an insurance company can expect when insuring an individual. People with pre-existing conditions, those who live in high-risk areas or those who have dangerous jobs will have higher rates than those who don’t fall under these categories. In a private sector insurance industry, these things can be taken into account when providing insurance rates and can lead to lower costs for an individual who has taken measures to make his or her risk lower. This is not the case in a government-controlled industry.
When an entire population is grouped together, with the risks averaged out, often the entire population base ends up paying a set rate via taxes. Each person is expected to be taxed the same amount, and lowering one risks does little or nothing to affect the amount of taxes that have to be paid. This lack of control leaves people with few options for getting cheap health insurance. In a private industry model, people have the ability to control their costs in some situations.
Of course, there are other factors that can affect rates that a person cannot control. People with pre-existing conditions may often find themselves with higher than average rates due to the risk they pose to the insurance company. Ways to compensate for this risk is by joining group policies where those risks are averaged out with others.
As with all systems, there are advantages and disadvantages. But no matter what that system looks like today or tomorrow, you can always count on us helping you find the best prices for your health insurance needs.
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