In an age where health and well-being are paramount, understanding the financial aspects of safeguarding your health is paramount. For many, the term average health insurance cost may seem like an enigma, shrouded in complexity and uncertainty.
However, in this comprehensive exploration, we will peel back the layers to reveal the actual expense of health insurance. By the end of this journey, you will be equipped with the knowledge and insights needed to make informed decisions about your health and finances.
Join us as we demystify the world of health insurance costs and empower you to budget wisely for your wellness.
How Much Does Health Insurance Cost
Comparing health plans in the ACA marketplace allows consumers to compare plans in their locality. The insurance cost on the Affordable Care Act marketplace varies depending on your insurance company, where you live, what plan you select, how many people you cover, your age and whether you smoke, and your family size, income, and household size.
What Is the Cost of Health Insurance?
The average monthly cost for a Bronze ACA plan is $928. For a Bronze plan, the average monthly cost is $928. These averages do not include premium tax credits or subsidies, which can lower costs for ACA plans based on household earnings.
How to Compare and Calculate the Average Health Insurance Cost
The best health insurance plan depends on your budget, current health status, health care needs you anticipate in the coming year, and what you are looking for from a plan.
Deductibles vs. Premiums
Health insurance plans usually have lower premiums and higher deductibles or higher premiums with lower deductibles. Your plan will determine how much money you pay monthly in premiums and how much out-of-pocket you pay when you need medical care.
If you expect little medical care in the coming year, a health plan with a large deductible may be wise. The health insurance companies will start paying for your medical care once your deductible is reached. Once you reach your deductible, you will usually pay coinsurance. This is where you and your health insurance company split the cost of health services.
You could pay 20%, and your health plan would pay 80% up to the maximum out-of-pocket amount.
Calculate how much your health insurance will cost you over a year, and then consider the deductible. Lower premiums would you save enough to justify a higher deductible, or is it worth it? Can you pay higher premiums, knowing you will save money if you need medical care?
A health plan with a lower deductible and a higher monthly premium might be a good choice if you anticipate needing health care, such as if you are expecting a baby or planning surgery. A high-deductible plan is best if you use only a few health services.
Bronze and Silver plans are the best options for ACA plans. They have higher deductibles but lower premiums. Gold and platinum plans may have higher premiums but will cost less when you need care.
Plan Benefit Design
The design of a plan can affect your ability to pay for insurance and the cost. HMOs and EPOs are the two most common health insurance plans in the ACA marketplace. The ACA exchanges also offer PPO and point-of-service (POS) plans, but they are less prevalent.
Health Plan Benefit Design Differences
| Feature | HMO | EPO | PPO | POS |
| Cost | Low premiums | Low premiums | Higher premiums | Mid-range premiums |
| Referrals required? | Yes | No | No | Yes |
| Out-of-network care? | No | No | Yes | Yes |
The HMOs and the EPOs typically have the lowest premiums. However, they do not allow for out-of-network care. These plans will only cover out-of-network care in an emergency. Otherwise, HMOs or EPOs require you to stay within the provider network. HMOs often require that primary care providers refer you to a specialist.
You can get health care outside your network of providers with PPOs or EPOs, but they cost more than in-network coverage. Higher premiums often accompany this flexibility.
You’ll need to decide how much flexibility and coverage you require. Choose an HMO or EPO if you’re looking for the lowest-cost health insurance but are okay with remaining in the network of providers.
7 Factors That Influence Health Insurance Costs
The ACA allows health insurance to use multiple factors in setting premiums. What influences the cost of health insurance on the ACA market?
1. Your Age
ACA marketplace insurers use a person’s age to set rates. This is different than the market for employer-sponsored insurance.
Costs of ACA Marketplace Plans by Age
| Health insurance plan member | Average monthly cost for a Bronze plan | Average monthly cost for a Silver plan | Average monthly cost for a Gold plan |
| Adult individual age 21 | $313 | $410 | $450 |
| Adult individual age 27 | $330 | $433 | $476 |
| Adult individual age 30 | $356 | $468 | $514 |
| Adult individual age 40 | $401 | $526 | $578 |
| Adult individual age 50 | $560 | $736 | $808 |
| Adult individual age 60 | $850 | $1,115 | $1,225 |
2. Where You Live
The location you live in can affect the amount of insurance that is charged. Insurance companies in states with fewer health plans may charge higher rates for coverage because there are fewer insurers to share the costs of providing insurance.
Rural areas have fewer options for health plans, so residents in these areas could pay more than people living in urban or suburban areas.
3. Whether You Smoke
The ACA allows insurance companies to charge higher rates on the market for smokers. Health insurance companies can charge smokers up to 50% more than non-smokers.
4. Metal Tier
The metal tiers in the ACA marketplace allow consumers to choose plans based on cost. Metal tiers include Bronze, Silver, Gold, and Platinum.
Most ACA health plans are Bronze or Silver. These have lower premiums but higher deductibles. Gold plans are more expensive than Bronze and Silver plans but have lower out-of-pocket costs. Platinum plans are a small fraction of ACA policies. They have high premiums but low deductibles.
You can choose a metal tier based on your preference for higher premiums and deductibles.
5. How Many People Are Covered?
Single coverage is less expensive than having multiple people covered by your health insurance plan.
6. Types of Health Plans
The design of a health plan can affect costs and how you receive care.
The lowest premiums are usually found in HMOs and PPOs, but you have to stay within the network of providers. In an HMO or EPO, health insurers will not cover any non-emergency services you receive outside the network. Instead, you’ll have to pay for all costs.
You don’t have to choose a primary provider or ask for a referral to see specialized care.
If you compare an HMO with a PPO, you must decide which is more important: lower premiums or flexibility.
7. Your Household Income
You can get premium tax credits or cost-sharing subsidies based on your household’s income. This can help you save money on premiums and other costs.
Premium tax credits are available to households below 400% of the federal poverty level. Those who have Silver plans can also receive cost-sharing subsidies to reduce their out-of-pocket costs.
Your household income and size will be considered when you enter the site.
What’s 400% federal poverty level in 2023?
| Family size | 400% of federal poverty level |
| One person | $58,320 |
| Two people | $78,880 |
| Three people | $99,440 |
| Four people | $120,000 |
| Five people | $140,560 |
Conclusion
Understanding the intricacies of health insurance costs is essential to securing your well-being and financial stability. In this journey to unravel the true expense of health insurance, we’ve explored the various factors that influence these costs, ranging from age and location to smoking habits and plan types. We’ve also highlighted the options available, including Bronze, Silver, Gold, and Platinum plans, and the significance of premiums, deductibles, and out-of-pocket expenses.
But knowledge alone is not enough; how you apply this knowledge truly matters. As you navigate the world of health insurance, it’s crucial to consider your specific needs and budget, weighing the trade-offs between premiums and coverage. Assess your current health status and anticipate your future healthcare requirements. By doing so, you’ll be better equipped to make informed decisions that align with your unique circumstances.
Now that you’ve gained a deeper understanding of health insurance costs, it’s time to take action and ensure you have the right coverage to protect your health and finances. If you’re looking for reliable Medicare Supplement Plans we’re here to help. Our expert advisors can guide you in finding the best plan that suits your needs and budget. Please don’t leave your well-being to chance; reach out to us today to secure the peace of mind you deserve.
Remember, regarding your health and financial security, knowledge is power, and action is key. Make the choice that ensures your wellness and your wallet stay in perfect harmony.
FAQs
What is the best way to find an affordable health insurance plan?
Enter your household income into the ACA Marketplace website to find affordable health insurance plans if you qualify.
The ACA Marketplace plans are eligible for tax credits on premiums and subsidies that can reduce the cost of insurance.
Medicaid is a federal/state program of health insurance that provides comprehensive coverage at low or no cost. When you enter your family size and household income into the ACA exchanges site, you can see your eligibility for Medicaid.
What is the monthly cost of health insurance for a single individual?
An average 30-year-old single person pays $356 monthly for a Bronze health plan. The same person will pay an average of $468 per month for a silver plan and $514 per month for a gold plan.
A single 40-year-old person pays, on average, $401 per month for a Bronze Plan, $526 per month for a Silver Plan, and $578 each for a Gold Plan.
When calculating rates for health insurance on the ACA market, insurers consider age as one of many factors.
What are the health insurance deductibles, and what can you expect to pay?
The average deductible on an ACA Marketplace plan is slightly over $5,000.
Bronze and Silver plans have deductibles of over $2,000, but the majority are Bronze plans. There are plans with lower deductibles, like $1,000 or less on the Gold level, but they come at a higher price.
