Many people wonder why state health insurance is different from one state to another. While there are a number of reasons responsible for this, the majority has to do with the state laws that are in place. This will often explain the rising costs of the premiums because the state mandates many different things, including specific benefits as well as the percentage an insurance company can take in premium increases every year.

Various states will require insurance companies to include various benefits within the state health insurance. This can include such things as preventative care, generic prescriptions and much more. While this may help out a good portion of the population, it doesn't come without a cost. As states strive to ensure the health insurance companies offer more with their policy, it is often the main reason for rising costs.

The insurance companies will take on some of the costs associated with these state mandates as a cost of doing business within a particular state; however, a lot of the expenses are passed on to the policyholder. Not all states have the same mandates, so it can be more affordable to get insurance from the same company with the same health status in one state over another.

In addition, state health insurance premiums are affected by the percentage that a state allows an insurance company to raise their premiums every year. Some states have a very small percentage of around 1.5 percent while other states are significantly higher - which costs the citizens of those states much more money.

The percentages for increase are taken at the discretion of the insurance company. Just because a law says that they can take a certain percentage does not always mean that the full amount is taken. Many companies will actually choose not to take any percentage at all as a way of appeasing their customers. It can also help to win over more customers who are looking to switch from a company who did opt to take the cost of living increase that they are afforded by state law.

Before anyone blames insurance companies for rising costs on premiums, one should take a look at the state health insurance laws before anything else. A state may be requiring a lot from the insurance companies, which gives them no choice but to increase premiums based upon what they have to offer and who they have to cover. Mandatory coverage of particular populations, more tests, different illnesses and other things can be requirements that states put in place for all health insurance companies to abide by, which will cost insurance companies more money to do business inside of particular states.