Health insurance providers charge different insurance premiums depending on the policy holder's health and the amount of coverage provided by the policy. This could mean that two persons with the same type of policy pay different insurance premiums.

Like all businesses, health insurance providers want to minimize losses and increase profits. Therefore, insurance companies charge more to customers whom they identify as being likely to file more claims due to extensive medical care needs. Policy holders that are elderly, smoke or have a serious genetic or physical condition that requires treatment will usually be charged higher insurance premiums.

The city in which a policy holder lives also impacts the cost of insurance premiums. Some cities file a higher number of insurance claims due to their ecology. Cities with particularly poor air quality, for instance, tend to have more insurance claims for lung treatments because of resident's difficulty breathing. Health insurance providers collect statistical data about the general health of a city's residents and factor that information into their premium charges. Individuals living in cities with high insurance claim rates may pay more for their policy.

Similarly, the overall health of a state or city's economy affects the amount of insurance premiums. A city or state with high unemployment or in which the majority of residents are uninsured may charge higher premiums to policy holders to reduce the amount of their losses. An insurance premium is intended to both pay for the costs of any claims made by the policyholder and help the insurance company cover losses it sustains from claims by other policy holders. Health insurance providers are more likely to sustain losses in locations with high unemployment and low numbers of insured persons, and are therefore likely to try to cover those additional costs by charging higher premiums.

Health insurance providers also charge higher insurance premiums based on the type of coverage. Preferred Provider Organizations (PPO) policies permit holders to see any physicians that accept the policy. Health Maintenance Organizations (HMO) require policy holders to first visit their primary care physician and obtain a referral to a specialist if the primary doctor is unable to treat their condition. HMOs are intended to reduce costs by having the primary care doctors, who often charge less, treat the majority of illnesses. PPO policy holders, therefore, are able to visit specialists without first seeing a primary care physician. This can make treatments, and claims, more expensive. As such, PPO policy holders regularly pay higher insurance premiums.

An insurance policy premium depends on many different factors. If you are charged an unusually high premium, consider whether any of the above factors may play a role in its calculation.