You’d be forgiven for thinking the answer to this question is, “How long is a piece of string?” The price of health insurance depends on a few things like your age, how many people you’re insuring, and the level of coverage you need.
So how expensive is it? And are there any ways to get the premium cost down? We’ve sifted out the important numbers and we’re ready to walk you through them in detail.
Let’s take a look!
What Are the Average Costs of Health Insurance?
First, here are the facts: The average monthly cost of health insurance (including employer and employee contributions) for an individual in 2018 was $574 per month and family coverage averaged $1,634.1
That average was taken from subsidized employer-based health insurance, which leads the pack in how people receive coverage.
The average monthly cost of health insurance (including employer and employee contributions) for an individual in 2018 was $574 per month and family coverage averaged $1,634.1
We also checked out census statistics in 2017. Here some related to health insurance:
- 67.2% of health insurance was sourced from the private health insurance marketplace.2
- 56% of private health insurance was employer-based.3
- 36.5% was provided by the government (through Medicaid or Medicare).4
Private coverage could mean coverage through an employer, or it could also mean you opt to buy your health insurance yourself and not through an employer’s subsidized plan.
In 2017, 16% of health insurance coverage was purchased by individuals directly and not through an employer.5 And if you’re wondering how much people pay for it, the average monthly premium for a single 27-year-old nonsmoker in 2019 is $406 for a “silver” plan or $288 for a low-cost plan.6 (More on these categories later!)
How Does Gender and Marital Status Affect the Cost of Health Insurance?
So, if we’re looking at the average costs for individual health insurance, a young single male could pay premiums as low as $100 or upwards of $300 depending on the level of coverage he wants. This is because young single men are the lowest-risk group when it comes to health insurance.
If we flip the tables and look at women, the premiums for basic health insurance could average higher than what men pay. That’s simply because of the health costs related to having children—which, of course, men don’t have to worry about.
So, what about families? As we mentioned above, families paid an average of $1,634 each month for their health insurance in 2018. It’s also worth knowing that if your family’s income falls below a certain level, you could save money on your health insurance premium with a tax credit.7
What Affects My Health Insurance Premium Costs?
Okay, here’s the deal: There are a bunch of factors (apart from your gender and marital status) that affect how much you’ll pay for health insurance—from where to live to your age and the plan and coverage you choose.
Let’s take a closer look!
Your Personal Details
Age: A few states (including New York, Hawaii and New Hampshire) do not factor in your age when it comes to setting their health insurance rates.8 But the majority of states do. So that means the older you are, the more you’ll pay for health insurance.
Smoking: Along with your age, being a smoker is a big factor in how much your health insurance premium will be. It’s simply because you’re at a greater risk of health issues if you smoke. In fact, insurers can charge up to 50% more for health insurance if you’re a smoker! 9
Along with your age, being a smoker is a big factor in how much your health insurance premium will be. It’s simply because you’re at a greater risk of health issues if you smoke. In fact, insurers can charge up to 50% more for health insurance if you’re a smoker! 9
Location: So premiums can vary slightly by location, but less significantly than some of the other factors. For example, monthly premiums in 2018 in the Northeast averaged $598 but $568 in the Midwest.10 And, for a family, the premium in the Northwest averaged $1,725 compared to $1,588 in the South.11
Bottom line: Your age and whether or not you smoke will have a bigger influence on your health insurance premium than where you live.
Type of Plan
The other big factors that affect your health insurance premium have to do with the plan itself—the type of plan and the level of coverage.
First, Does Your Plan Cover an Individual or the Whole Family?If you’re just insuring yourself, your monthly premium will be lower compared to covering your spouse and any dependents.
What Is Your Plan Type?
Shopping for a health insurance plan can feel like being in a grocery store and staring at rows of the same product for what seems like hours—only it’s less exciting and more expensive!
Here are the plans and networks you can shop for in the health insurance marketplace:
- Preferred Provider Organization (PPO): This plan was the most popular in 2018 in terms of enrolment, with 49% opting for PPO.12 If you have a PPO plan, you pay less for medical care if you use a provider within the plan’s network.
- Health Maintenance Organization (HMO): Enrolling in an HMO plan means you’ll be limited to using doctors within your network except in an emergency.
- Point of Service (POS): This plan offers lower medical bills if you use doctors, hospitals and health care providers within the plan’s network. If you have a POS plan, you’ll always need a referral from your primary care doctor in order to see a specialist.
- Exclusive Provider Organization (EPO): This is more of a managed plan where you’re only covered for care if you use doctors and hospitals in the plan’s network unless in an emergency.
Level of Coverage
Once you’ve decided on a plan, it’s time to talk about level of coverage. Think of this like a range of virtual medals in an Olympic event. These tiers offer up options on how much your plan will pay for, and how much you will pay.13
If you opt for bronze coverage, you’ll pay lower monthly costs, but more out-of-pocket costs when you do need care:
- Your provider will pay: Around 60%
- You will pay: Around 40%
Silver is the middle ground with lower deductibles. You’ll pay more in premiums every month, but have lower out-of-pocket costs compared to the bronze level:
- Your provider will pay: Around 70%
- You will pay: Around 30%
- Cost-Sharing: Silver plans also come with the discount of “cost-sharing” reductions. It all depends on your income. But if you qualify for a cost reduction, you could see your provider cover more of the cost of care up to the 90% mark.
Gold plans have high monthly premiums, but low deductibles, coinsurance and out-of-pocket costs:
- Your provider will pay: Around 80%
- You will pay: Around 20%
This is the highest monthly premium out there, with the lowest out-of-pocket costs. So you’re really putting all your eggs in that big monthly premium basket with this one! But low deductibles mean platinum plans start paying toward your care much sooner.
- Your provider will pay: Around 90%
- You will pay: Around 10%
Help From an Insurance Pro
Whether you’re choosing your health insurance privately or through your employer, finding the best plan for you and your family can be confusing!
What’s best for you? We can help with our free Endorsed Local Providers (ELP) service. You’ll be able to find a local insurance expert who’s ready to guide you through making health insurance work smarter and harder for you and your family.