Health insurance quotes are based on many different factors, with the goal being to ensure that the company still makes a profit. Every insurance company has a very basic model which assigns premiums based upon the risk they are to the company. This model has proved effective for the most part, as insurance companies rarely fail to turn a profit. The average American health conditions do play a significant part in deciding premium costs, although they are not the sole factor.

How the Risk Factor Works

When a company issues an individual a health insurance policy, they are taking a gamble that the money coming in from all of their customers (from premiums) will exceed the amount of money that they spend on claims and other expenses (such as overhead). When a potential customer applies for health insurance, the company will take a look at his or her medical records, history and other factors and then determine how likely it is that the person will make a claim and fix the health insurance quotes accordingly. Older people (with more medical problems), those who have unhealthy habits (such as drinking or smoking) or otherwise seem to have a higher chance of falling ill are considered high risk. To ensure that a profit is made, these individuals will have to pay more money on their premium payments.

The Average American Health

The average health of the American population does not directly affect most insurance policies, as companies group together customers to form "risk pools", which stabilizes the market to a degree. The more people in a risk pool or partaking of a particular policy, the safer that policy is in terms of risk and potential cost to the company. The fact that the average American is getting less healthy (due to rising obesity and cancer rates) serves to increase insurance rates to a degree. However, the rising cost of healthcare has mostly been blamed on a lack of appropriate measures by the government and the advent of newer, more expensive medicine and treatment.

The average American is in bad health, however, according to recent studies and surveys, which show no reduction in obesity rates, the cause of heart disease and other problems. Other prevailing problems like cancer are also to blame for the average health state. All of these cases put a large burden on a struggling government, whose health care reforms have been largely ineffective in reducing overall costs. This is how the average health of the nation affects the individual, however, the decision to choose a healthy lifestyle is up to the individual. This decision will mean lowered health care costs, lower premiums and a more enjoyable life.