Illinois Health Insurance Practice Exam

Which factor is typically not considered on health insurance applications to base premiums?

1. Geographic region of residency

2. Past medical history

3. Age

4. Family composition

The correct answer is: Past medical history

In the context of health insurance applications, premiums are influenced by a variety of factors. However, past medical history is often not a determining factor in setting premiums under many forms of health insurance, especially in compliant insurance plans, such as those governed by the Affordable Care Act. Insurance providers generally assess factors like geographic region of residency, which reflects the cost of healthcare services in different areas; age, since older individuals tend to have higher health risks and thereby higher premiums; and family composition, as the number of dependents can influence the overall risk and coverage needs. In many regulatory environments, past medical history cannot be used to discriminate against applicants, ensuring that individuals are not penalized for previous health issues. This approach promotes fairness and access to insurance, thereby making it more equitable for everyone.