Health insurance companies are often regarded by clients as mysterious entities which are prone to change their rates at any moment and without warning. Many families fear calling their company about a health policy for fear that questions may increase the cost of their monthly premium or that part of a paid-for procedure will be clawed back. While companies are not quite so wanton in their ability to change rates, it is true that there are times when health insurance providers will change their rates and affect those who carry policies. Knowing when and why are the keys to understanding the world of health insurance companies.

Just as with any form of business, health insurance companies are in the market to make a profit, and part of that profit comes from the amount charged directly to customers. Most states have prohibitions how often rates can be raised and by how much in order to prevent the wanton increase of monthly premiums, which helps to keep the amounts paid by the average customer reasonable. But in addition to regular increases in health insurance rates as allowed by law, there are times and conditions under which insurance rates may raise for clients.

The first is if a disaster or extreme use of insurance services occurs - such as the 2001 World Trade Center bombings or due to the property loss caused by Hurricane Katrina. In cases such as these, insurance rates may suddenly rise as companies try to make ends meet. Clients can also expect to see insurance rates rise when their policy is up for renewal and they have made a significant amount of claims or if an ongoing condition of some kind has been discovered. While general state laws prevent companies from dropping a client even if every dollar of their coverage has been used over the policy term, these clients can expect to see their policies raised in order to accommodate the higher risk they pose to the company - but any such increases must be detailed and justified by the company, and a patient can choose to take a company before their state's Insurance Commission if they feel they have been unfairly treated; the board is a neutral entity in such cases.

While it is true that a health policy will often see its rates increase over time, simply calling a health insurance company or asking questions about a policy cannot cause such an increase. A specific event and or the actions of a client must be the precursor to any such raise, and it must come with an explanation of why the higher rates are being assessed, and clients must understand they can still challenge any increase.