Insurers set premiums based on the overall claims experience of their entire risk pool, and projected costs for the coming year. In the individual and small-group health insurance markets, insurers set an index rate and then can only vary it based on zip code, age, and tobacco use. (Some states impose their own limits that are even more restrictive in terms of how insurers can vary premiums.)   In the large-group market, insurers can use each group's claims experience to set rates, as community rating is not required for that market. Many large employers opt to self-insure, which means that they only contract with an insurance company to administer the policy, but the employer uses its own funds to cover employees' medical claims.   If you're buying coverage that isn't regulated by the ACA (such as a Farm Bureau plan in a state where these plans are not regulated as insurance), the company can use your medical history to determine your premiums. This is also true (in most states) for Medigap plans if you're applying after your initial enrollment window ends.