Are there any limitations on what an insurance company can charge for coverage?

Get Legal Help Today

 Secured with SHA-256 Encryption

Jeffrey Johnson is a legal writer with a focus on personal injury. He has worked on personal injury and sovereign immunity litigation in addition to experience in family, estate, and criminal law. He earned a J.D. from the University of Baltimore and has worked in legal offices and non-profits in Maryland, Texas, and North Carolina. He has also earned an MFA in screenwriting from Chapman Univer...

Full Bio →

Written by

UPDATED: Jul 16, 2021

Advertiser Disclosure

It’s all about you. We want to help you make the right legal decisions.

We strive to help you make confident insurance and legal decisions. Finding trusted and reliable insurance quotes and legal advice should be easy. This doesn’t influence our content. Our opinions are our own.

Editorial Guidelines: We are a free online resource for anyone interested in learning more about legal topics and insurance. Our goal is to be an objective, third-party resource for everything legal and insurance related. We update our site regularly, and all content is reviewed by experts.

The cost of premiums for health care insurance is generally left to the marketplace or negotiation between insurers or plans and employers, associations or labor bargaining units.

One exception is in the Medicare assignment situation. There persons eligible for Medicare insurance are permitted to enroll in private insurance or health service plans (HMO’s) at fixed premiums and the Medicare benefits are assigned to the insurer or plan. The insurer or plan promises to provide coverage and benefits that may exceed, but cannot be less than that mandated under Medicare.

Through a combination of the effect of supply and demand in the marketplace or by the effect of collective bargaining, health insurance premiums have developed a certain hierarchy of cost. Traditional fee-for-service insurance generally involves the highest premium rate and also the highest rate of growth of premium over time. The next lowest premiums are generally associated with insurance or plans that offer some choice of providers with limits, such as Preferred Provider Organizations (PPO’s) or Independent Practice Associations (IPA’s). The lowest premiums and rate of growth of premiums have been associated with health service plans or HMO’s as a result of their limits on choice of health care provider and choice and amount of coverage and benefits.

New variations or hybrids are developing. Point of Service Organizations (PSO’s) are essentially a hybrid between limited choice plans and HMO’s where each insured or member has a choice to determine the cost to them of the health care at the time the service is to be provided, by either selecting from a part of the plan fixing the health care provider s/he may see or from a limited choice part of the plan.

Get Legal Help Today

Find the right lawyer for your legal issue.

 Secured with SHA-256 Encryption