How state governments provide oversight of health insurance cost is largely a misunderstood topic. A health insurance quote over the phone seems as far removed from state oversight as snap peas and the FDA; however, the two are in fact closely linked. State legislators and health insurance regulators are sworn to help establish fairly distributed prices for health insurance premiums. Controlling price variations for health insurance is the goal of state oversight. Health insurance quotes might vary greatly if not for state oversight.

The authority of many States extends to regulating: individually purchased insurance, fully funded employer insurance plans and multiple employer welfare arrangements. State governments generally do not regulate self-funded, private, employer-based health insurance plans. State oversight of the health insurance quote primarily focuses on improving the leverage of small business groups and individuals. State oversight of health insurance costs for large businesses with 50 or more employees is not generally seen as being necessary. A large company should have enough leverage to make a health insurance quote reasonable.

With only a few exceptions, most states regulate health insurance cost so health insurance companies can not astronomically raise prices on sick people. This form of state oversight focuses on matching health insurance premium charges to a scale, region or formula. State oversight of health insurance costs resulted in rate bands being created in some states. These bands were essentially ceiling and basement premium charges the state would allow companies to charge individuals meeting certain checklist criteria addressing issues of general health, age, gender, previous illnesses, etc. In this way, health insurance cost remains constant according to similar checklists.

Pure community rating is another regulatory framework developed through state oversight. By dividing regions of a map, a pure community rating sets a health insurance quote for individuals living in a particular area. In this way, state oversight results in prices being constant geographically. A variation on this method is called adjusted community rating which still uses geographic areas; however, prices are also allowed to fluctuate based on checklists as in the rate band method of state regulation.

There are people who claim state oversight raises the cost of health care and this may be true. However, state oversight attempts to regulate variation in the costs of a health insurance quote. Without regulation, health insurance companies could drastically raise the prices of those people costing them the most money. The ones costing the health insurance companies the most are the sick people using health care. State oversight of health insurance quotes is an attempt to help the people who need it the most.