We are barely three months into 2018, and you can already get a sense of the trend for insurance costs nationwide.

Some important shifts in policy and legislation have already signaled significant changes in the health insurance market. And even though some of these reforms are still a bit away from being enacted, their approval is already influencing the current landscape.

There’s no denying that policy and laws are one of the leading issues impacting directly on insurance prices. However, they aren’t the only ones. And even though we all hope that these changes eventually lead to an overall healthier system, the brunt of these changes is already being felt by the average taxpayer trying to find good, affordable insurance coverage to meet theirs, and their family needs.

We know insurance is going up this year, so the question that hangs most prominently in the air isn’t how, but why.

Why health insurance went up in 2018? Let me take a stab at trying to cover the main reasons that have influenced the trend so far.

Some key factors shaping Insurance costs:

There are a lot of aspects that come into play when an insurance company is figuring out how much to charge for a given premium. And even if I tried, I probably wouldn’t be able to do a decent enough job trying to cover all of them.

Instead, I’ll keep the discussion focused on three main topics which I believe are essential in dictating the way insurance prices move, and that have clear-cut examples in 2018’s insurance costs movements: Laws and regulations, risk pools, and projected medical costs.

Laws and Regulatory measures: This one’s pretty easy to figure out. Any legislation that directly affects the industry is bound to have a significant effect on the way price trends end up taking.

I’ll go into a little bit more depth when I take a look at some of the major ones being discussed in 2018, but suffice it to say that when lawmakers approve a law changing the way things work, it will end up reflecting on the customer’s payment, one way or the other.

Risk Pool Composition: This is another big one that falls a bit more on the technical side, requiring a more “insider-baseball” outlook on how insurance companies manage their clients to provide the services needed and stay in business.

Risk pooling refers to the way insurance companies structure their customer base, which in turn determines how much their premium costs. The theory behind it is that you group people in a certain way, hoping that the lower costs for insuring healthier individuals will offset the higher expenses of covering for the less healthy.

Larger risk pools tend to be more stable, meaning they are easier to predict and project costs for.However, a risk pool composition is equally important as its size.

If a given premium cost/coverage setup manages to attract a large number of people with higher expected claims, then the average premium will increase, which insurance companies try to offset by enrolling a more substantial number of lower-cost individuals.

Projected Medical Costs: However you slice the whole insurance costs situation, medical costs are at the bottom of it. With most dollars being paid for a premium eventually being spent to pay medical supplies and services bills, it is not difficult to draw the connection.

A simple way to gauge this is to take a look at policy cots variation by state and compare them to medical costs in the area. The cost of medical services and products vary significantly by location due to individual medical practices of each region. The patterns that emerge suggest a strong correlation of how expensive medical cost are one a given state, and the prices insurance policies utilize to be able to meet them.

Now let’s take a look at what is changing this year for all three factors in the US, nailing down why health insurance went up in 2018.

How all of these shapes up for the US in 2018?

Let’s start with the easy one: medical costs.

The way in which medical services and prescription drugs are used affect their pricing as much as their individual, unit costs.

Much like in 2017, medical supply costs are projected to increase around 5 to 8 percent in 2018, and spending in prescription drugs is leading the charge, expected to outpace the costs of other medical services slightly.

Then, there’s the whole subject of regulation and the current climate of uncertainty that surrounds it.

Firstly, Trump’s administration has shown that not only it’s not afraid to change existing regulation in the health insurance field, but that it is also looking into putting new elements of legislation in place.

One of these points of uncertainty being the changes to Affordable Care Act (ACA) which are already being projected to become a challenge for both, insurers and payers in the individual health plan market.

Changes to the ACA could also bring significant shift in how insurance companies craft their risk pools, which also affect how they price their given policies.

All these factors considered, it is not difficult to figure out why health insurance went up in 2018.

This only brings even more attention, however, to the need of the average joe looking for good coverage at an affordable price, to do a thorough job and shop around comparing as many options on the market as possible.

For the looks of it, that might be the only few strategies left to find a good deal on your insurance payments.