There are many reasons for sudden premium changes to a health insurance policy. These reasons can stem from industry-wide changes beyond the control of any one individual insurance carrier, or can result from interior changes with how an individual carrier chooses to administer benefits. It can be comforting to know that overall rate hikes across the industry are somewhat predicated upon health care reform initiates introduced by the state, which regulates minimum healthcare standards for its residents. While some sudden premium changes are within the insurance industry's control, others may not so readily be.

Sudden premium changes for health insurance that are related to health care reform, such as the type of sweeping reform initiatives currently being introduced at the federal and state levels, can be instituted very quickly indeed. Insurance companies suddenly burdened under new standards and minimums may raise rates in to the tens and twentieth percentile increases to account for new cost overheads they are bearing. These rates are still subject to approval by the states however, which means that any rate increase due to health care reform has been ratified by the governing organization that oversees healthcare for that state.

Sudden premium changes for health insurance that are related to individual factors like age of the insured, area of residence, gender, and other individual factors can simply be a factor of how that insurance company handles benefits disbursement for different populations. If costs were higher than average during the last calendar year for females of a certain age living in a certain region of the country, the insurance carrier may elect to increase premiums costs for that population because they are now statistically regarded as higher risk.

Sudden premium changes for health insurance that are related to natural yet unavoidable events, such as terrorism, acts of God, natural disasters, and other such events, may result from extreme dips in profitability after a huge mass payout. Such premiums increases will likely affect all participants in that insurance carrier's health care plans, and may extend beyond the individual carrier to other carriers operating in the affected areas.

Understanding why your health insurance rates may change suddenly is important for planning for budgetary constraints that may result from a sudden premium change in your insurance policy. Understanding why the increase occurred will also help if a search for a new, more affordable health insurance policy is necessary as a result of the rate increase. It may also be possible to elect to have a higher deductible or move to a lower level of benefits to manage budgetary concerns when industry-wide sudden premium increases occur as a result of natural disasters or health reform policy initiatives.