I posted the following question in one of the insurance forums I belong to:

Do you have health insurance? If so, are you covered under your employer’s plan or do you have an individual plan?

I asked this question because I wanted to try to get a sense of the truth to the numbers being published about the number of uninsured people in the US.

I received a very comprehensive answer about the cost of insurance from John K. Arnold, a Managing General Agent in the health insurance business based in Orlando, FL. Read the rest of this entry »

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Health insurance premiums are directly affected by what is called the “area factor”. To you and me that means in what zip code do I live?

The cost of medical care varies from one geographical area to another and the differences in cost are considered when monthly premiums are determined.

So, what leads to these differences? This variation is based on to the general cost of living of the area, differences in medical practices, the degree of specialization of services and the amount of competition in the area.

Risk also plays a role in the cost of medical care. For instance, in an urban area that frequently has accidents and more health risks the costs would be higher than costs of a suburban area that has fewer accidents and less health risks.

Each insurance company has their own actuaries that calculate the area factor. So, if you live in an area with elevated medical costs, you may want to try to find an insurance company that offers the best coverage at the lowest price for your particular zip code.

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