Frequently Asked Questions

1. What is an insurance premium?
2. How do insurance companies determine premium health insurance rates?
3. What is the Arkansas Insurance Department's (AID) role in setting health insurance premiums?
4. How do rates determine my health insurance premium? 
5. Why do my premiums go up? 
6. What if I feel my health insurance premium increased incorrectly? 
7. How can I reduce my insurance premiums?

Q. What is an insurance premium?

A. A premium is the amount paid for your health insurance or plan. You and/or your employer usually pay monthly, quarterly, or yearly.

- Back to top -

Q. How do insurance companies determine premium health insurance rates?

A.  Insurance companies look at a number of lifestyle factors including smoking and alcohol use when determining health insurance premium rates. Factors such as your age, sex, where you live, and health status play a role.

- Back to top -

Q. What is the Arkansas Insurance Department's (AID) role in setting health insurance premiums?

A.  The Arkansas Insurance Department reviews and must approve all premiums charged by insurance companies for individual major medical policies and policies sold to employers with less than 50  employees. During the premium rate review process, consumers will be provided an opportunity to submit comments on specific rate increases proposed by the insurance companies. 

- Back to top -

Q. How do rates determine my health insurance premium?

A. When an individual applies for individual health insurance coverage, they are requested to provide health information about themselves and/or their family members.  When determining rates, the insurance companies use the medical information on the application and additional information which the company may obtain from the applicant’s physician.   Once the company has determined the health status, the applicant will be assigned a base rate and could be rated up (charged a higher rate) based on the applicant’s health status.  Once the policy is issued and the rate established, the consumer will be placed in a pool with other individuals who have the same type of policy.  Any rate increases on the block of business is not determined by individual claims, but by the claims experience of the entire pool.

- Back to top -

Q.  Why do my premiums go up?

A.  Medical costs are driven by everything from increases in hospital and doctor charges to greater use of medical care due to new technologies and increased usage of prescription drugs. This is commonly referred to as the medical trend.

- Back to top -

Q.  What if I feel my health insurance premium increased incorrectly?

A.  If consumers feel their health insurance premium has increased incorrectly, contact the Consumer’s Assistance Program (CAP) at 855-332-2227 or 501-371-2645. Consumers may also log onto www.insurance.arkansas.gov. CAP is a federally funded program and works to assist consumers with filing complaints and appeals, enrolling into health coverage, and educating consumers on their rights and responsibilities with respect to group health plans and health insurance coverage. 

- Back to top -

Q.  How can I reduce my insurance premiums?

A. 

1. Shop around for health insurance.
2. Consider raising your deductible.
3. Live a healthy lifestyle.
4. Get educated on health insurance and understand your benefits.

- Back to top -