Online Health Insurance Quotes Increase Competition
There are dozens of buzzwords when it comes to the health insurance industry and the larger health care debate, but few are as big as “increasing competition.” Online health insurance quotes are already working to increase competition by more efficiently connecting insurance customers and insurance companies. Better yet, it creates an atmosphere in which insurance companies know they’re in direct competition with other companies, rather than trying to isolate potential customers from the broader marketplace.
Of course, none of this does you any good unless you use health insurance quotes to shop for your individual, family, or small group health insurance. This is exactly what NetQuote offers by connecting you with the companies that offer health insurance in your state. Unfortunately, we can’t increase the number of health insurance options, but we can help ensure that you’re aware of the currently available alternatives.
How Do Online Health Insurance Quotes Help?
Politicians frequently talk about how health insurance exchanges and a more transparent health insurance marketplace will reduce the need for insurance companies to spend premiums on advertising. This is true, but it’s not the biggest cost-cutter. Online health insurance quotes also reduce the need to pay high commissions to health insurance agents, some of whom earned 15% commissions on insurance policies. Admittedly, health insurance agents serve a very important purpose. With the complicated rules and numerous policy options that govern health insurance, consumers need a knowledgeable expert to advise them on the best policies given their circumstances. Yet, with online referral services, these health insurance agents can deliver more customer service and less salesmanship. Because insurers know that a potential customer will look at policies from multiple companies, there is no advantage in trying to strong-arm a consumer into buying a policy on the spot. Because customers approach them, there is less pressure to attract customers or convince that now is the time to buy a policy. Commissions may still be warranted, but not on the scale of 15%.
Premium/Benefits Analysis of Health Insurance Quotes
Along the same lines, if you’re going to criticize insurance companies for their business model, the place to start is wasteful overhead, not profit margins. The average health insurance company generates profit margins of only 3%, while paying out benefits to the tune of 99 cents for every premium dollar collected. This is possible because insurance companies generate a significant portion of their revenues through investments made with customer premiums. This is how insurance works. The average auto insurance company is able to pay out $1.12 for every premium dollar collected.
That said, the average health insurance company has considerable overhead: Between salaries, legal fees, marketing, and other expenses (like traveling to the nation’s capitol for a Congressional hearing), a company might spend 25-35% of its revenue. Although health insurance quotes are on the rise primarily because of the rising cost within the health care system, these overhead expenses account for the biggest potential savings within the health insurance industry itself. To this end, some states mandate a certain percentage of premiums or revenues are paid out in health benefits. Other states have the power to approve actual health insurance rates charged to consumers.
Choosing Online Health Insurance Quotes
Increasing competition is only half the battle and, ultimately, does you little good if you don’t translate competition into an informed decision. It’s not easy. Not only is choosing a particular health insurance policy complicated, it’s also a stressful for most people. NetQuote can help here, too. By filling out a quick online form, you will be contacted to multiple companies offering online health insurance quotes and coverage plans. You can see how various deductibles, caps, and specific types of health coverage affect premium costs and potential out-of-pocket costs. Better yet, you can review this information from the comfort of your own home and at your own pace. Then, once you’ve had a chance to digest information, you can make the best possible decision for your health insurance.
