Health insurance is one of the most important aspects of any lifelong health plan. Finding the right quote for a family can make tough times easier and can help mitigate much of the financial burden that comes along with the monetary value of health care treatments. Many consumers often wonder how online health insurance quotes can be offered to such a broad range of clients at such similar terms, as it is impossible to know the medical histories of an entire population. In general, insurance companies use a concept known as base capitation to determine the average cost of health care for an individual over the course of their lives. Based on that figure, they then extrapolate an insurance quote, including a profit margin, and advertise that to the public. In cases of unique medical situations or pre-existing conditions, these quotes are adjusted as necessary.

Base capitation begins with an average, healthy American as its starting point. Typically, this person is an adult, and insurance companies estimate what this imaginary person's overall health care needs will be based on a host of factors using statistics gathered about health care use, hospital stays, and the prevalence of injury. Using these numbers, they estimate what healthcare services this person will use and how often they will use them over the course of their lifetime. This total amount is called base capitation, and is then used to set the base price for insurance quotes. By creating a base capitation amount, insurance companies are able to take into account what the “average” American will spend on healthcare in a lifetime. Some, of course, will spend more, but many will spend a great deal less, and the net result is a profit for the company and an assurance that the company will have enough money to pay out any claims that come forward.

Every company will calculate its base capitation amount differently, based on where they are located as well as using any specific health concerns in the area as a guideline. Overall, however, most base capitation amounts are relatively similar, leading to a great many online health insurance quotes that look very much the same. As mentioned earlier, things such as pre-existing conditions and degenerative conditions can adversely affect a healthcare quote, but all persons are initially judged using the base amount.

This concept has little effect on the month to month premiums paid by consumers, but it is worthwhile knowing how insurance companies arrive at their numbers and exactly what they mean. Since over the course of a lifetime insurance premiums paid to a company will total a significant dollar amount, knowing as much as possible amount the industry is simply good sense.