Health insurance is essential to cover medical expenses. Whether you have a pre-existing condition or simply want to be prepared for the unexpected, the type of insurance you choose has a big impact on price.
Learn how much health insurance costs for both employer and marketplace plans and the factors that affect your returns.
How much does health insurance cost?
group health insurance
Group health insurance refers to insurance provided to a group of people, usually employees of the same company. You can choose between an individual plan or a family plan that covers your immediate family. In most cases, your employer will pay for a portion of the plan, so it can be less costly than other options.
Individuals with group health plans paid an average of $8,435 in annual premiums (about $703 per month) in 2023, according to data from KFF, an independent health and medical research firm. For a family, total annual premiums average $23,968, or about $1,997 per month.
These prices are higher than they were in 2022, with premiums for both family and individual group health insurance plans increasing by 7%.
personal health insurance
How much does it cost to buy health insurance on my own? If you don’t have group insurance offered through your job (or a family member’s job), health insurance marketplace. The marketplace offers multiple health and dental plan choices based on several factors, including what’s available in your state.
The cost of personal health insurance depends on several factors, including your age, family size, and the amount of subsidies you qualify for.
We analyzed approximately 790 marketplace plans across 33 states to determine average prices. For the overall average, we looked at age groups that included children and girlfriends up to age 60. The scale of insurance includes from an individual to a family with her three or more children. Premium data does not take into account tax subsidies that may reduce health care costs.
Monthly insurance premium cost
For monthly premiums, the overall average cost was $1,178. However, that number can vary greatly depending on age. For example, the average monthly premium for a 21-year-old was only $397, while the average monthly premium for a 50-year-old was $712.
Deductible amount
The average annual deduction for individuals was $5,101. That figure is more than double for families whose average annual deduction was $10,310.
Maximum co-payment amount
The average out-of-pocket maximum for individual policyholders was $8,335. For families, that amount doubled to an average of $16,672 per year.
How to calculate health insurance premiums
In addition to the premium, health insurance has other costs throughout the year. All of these additional charges can affect the amount you pay for your health insurance.
Deductible amount
The deductible is the amount you have to pay out of pocket each year before the plan’s benefits take effect. Let’s say your annual deductible is $8,000 and your hospital bill is $12,000. So far this year, I have had no other medical expenses. With an additional health insurance plan he would be responsible for $8,000 before some or all of the $4,000 would be covered.
copay
This is the amount you have to pay if you visit a medical facility. In most cases, your copay will be a set amount for the specific service. For example, your plan has a $25 copay for primary care visits, a $50 copay for specialist visits, a $75 copay for urgent care visits, and a $75 copay for emergency room visits. can be as much as $300.
If copays don’t start until you meet your deductible, the amount you pay for a doctor’s visit depends on the services you receive and the rates your insurance company negotiates with the doctor.
coinsurance
After your deductible is met, you may be responsible for a portion of the bill known as “coinsurance.” For example, if your deductible is already paid in full, but you have $1,000 in medical bills and your coinsurance liability is 20%, you’ll pay $200.
Self-pay limit
Your annual out-of-pocket limit is the maximum amount you can expect to pay for medical expenses in a year. This includes deductibles, copays, and coinsurance. Once you reach the limits for these categories, you will no longer have to pay service fees. Expenses that don’t count toward your out-of-pocket limit include out-of-network care, services not covered by your insurance company, and insurance premiums.
Marketplace plans have out-of-pocket maximum limits. For example, in 2024, the out-of-pocket maximum will be $9,450 for an individual and $18,900 for a family.
Potential savings in medical costs
There are many different types of expenses that can affect your health care costs, but there are ways to save money. The type of discount you receive depends on whether you have group insurance or individual health insurance.
Group insurance savings
Most states require employers to contribute to their employees’ health insurance plans to lower premiums. The size of your company can affect the savings on your insurance policy. KFF research shows that larger companies are more likely to make larger contributions to family coverage for their employees.
Savings through a personal health insurance plan
The Affordable Care Act (ACA) can provide monthly subsidies through the Health Insurance Marketplace based on your income and household size. Subsidies can cover part or all of the premium. However, the subsidy is determined based on your income, so if you earn more than the amount you declared, you may have to return some of the subsidy at tax time.
What factors affect health insurance premium rates?
Be aware of several variables that affect health insurance premium rates.
“Plan type, who’s covered, deductibles, age, location, and whether you smoke are all factors in the cost of health insurance,” said Kim Buckey, vice president of customer service at benefits company OptaVise. .
For example, there are five plan tiers in the marketplace, but not all of them are available in your state: Bronze, Silver, Gold, Platinum, and Catastrophe. Lower levels, such as Bronze, have higher out-of-pocket limits and deductibles, but generally lower premiums. Higher-tier plans, such as Platinum, have higher premiums and lower out-of-pocket limits.
Factors that affect your health, such as age and smoking, can also cause premiums to rise. In most cases, ongoing medical issues will not affect costs. However, some plans outside the Marketplace, such as short-term health insurance, may not follow these rules.
“If you haven’t purchased an ACA-compliant plan, your pre-existing conditions can also impact your costs,” Buckey says.
How to choose the best medical insurance
The most important part of choosing the health insurance plan that’s best for you is understanding how it works.
“You need to consider not only the premium, but also the total amount you can expect to pay when you actually use the plan,” Buckley says.
This includes ongoing costs such as copays, deductibles, and coinsurance. In addition to medical services, don’t forget to consider the cost of medications.
“Ask yourself how prescription drugs will be covered. Will there be a flat copay for each tier, or will there be coinsurance?” Buckley said. “Carefully evaluate what is covered and what is not.”
Also, look at your plan’s network, which is the pool of doctors and medical centers your health plan has access to. Some plans may offer more doctors and care centers in your area than others. Also, if you already have a primary care physician or specialist, you can see if they are part of your future plan’s network.
different types of health insurance plans
There are several different types of health insurance plans, and they all depend on how your insurance works with your health care provider. These options can be found in the marketplace and may also be offered as an option in a group health care plan.
PPO and POS plans generally offer more flexibility than EPOs and HMOs. PPO and EPO usually make it easier to see a specialist. Because with PPO, you probably don’t need a referral from your doctor to see a specialist.
Can I lower my health insurance premiums?
It depends on where you buy your insurance. If you’re purchasing health insurance through your workplace, check out all available plans during your employer’s recruitment period. Some plans may offer higher deductibles in exchange for lower monthly premiums.
When you purchase an individual health plan on the Marketplace, your income and family size can affect your monthly subsidy. If any of these details change, you may qualify for additional savings or have your subsidy reduced.
Frequently asked questions (FAQ)
Employer-sponsored health insurance plans can be less expensive than marketplace plans because your employer pays a portion of your premiums. This is especially true if you don’t qualify for marketplace subsidies based on your income or family size. However, your employer’s plan may have fewer options to choose from to keep costs down.
One benefit is that your employer plan is paid for from your pre-tax paycheck, which lowers your overall income tax bill each year.
Generally, the older you get, the higher your health insurance premiums will be. Some states may limit price increases based on age. However, if you are a senior, you can expect the price to be about three times higher than him.
Marketplace plans are required to cover pre-existing conditions without incurring additional charges. According to Marketplace guidelines, pre-existing conditions include everything from diabetes to pregnancy. These changes apply to both Marketplace plans and employer policies.
No, prices for Marketplace plans do not change throughout the year, but may change from year to year if you select a plan during Marketplace’s open enrollment period.
