From Healthcarepedia
Jump to: navigation, search

What is a premium?

A premium is a monthly financial cost paid by a health plan member to be covered by a health insurance plan.

The amount of premium that is required for health insurance coverage depends on many different factors. Health insurance companies examine the type of healthcare services offered by the health plan, the likelihood of those services being used by the health plan members covered by the health plan, and the amount of competition that the insurer faces.

Professionals known as actuaries calculate these factors to determine the amount of proposed premiums.