Key points
- Your health insurance premium will depend on factors like the size of your deductible, how narrow your network is and whether you get insurance on the job or buy a plan on your own.
- On average, a single person pays about $117 a month for employer-sponsored coverage and $477 a month for a plan on the health insurance marketplace, before any subsidies.
- Besides monthly premiums, health insurance expenses include copayments, coinsurance and spending to meet your deductible.
Health insurance is an essential safeguard against unexpected and unaffordable medical expenses, but policies can be pricey. You can spend thousands a year on premiums, and even with health insurance, you may face copayments, coinsurance and a deductible. The costs can add up.
In fact, health care costs make up an average of 8.15% of all consumer spending in the United States.
How much is health insurance? Here’s how much premiums could set you back, plus what other costs you can face.
How much is health insurance for the average plan?
When calculating the cost of health care, most people think about health insurance premiums — how much you have to spend each month to maintain coverage. Premiums vary based on the type of coverage you have and whether you get your health insurance through an employer or purchase a policy on your own.
Employer-sponsored plans
With an employer-sponsored plan, or health insurance you get at work, costs vary based on the plan you choose and how much of your premiums your employer covers.
The average annual premium for employer-sponsored health insurance was $8,435 for an individual policy in 2023 and $23,968 for a family plan. According to the Kaiser Family Foundation, premiums for family coverage increased by 22% over the past five years, and 44% over the past 10 years.
Keep in mind those totals include what your employer pays. On average, workers contribute 17% of the premium for single coverage and 29% of the premium for family coverage. So in 2023, the average annual worker contribution was $1,401 for an individual plan and $6,575 for a family plan.
Individual plans
If you don’t have access to health insurance via your employer, you can purchase an individual policy through the Health Insurance Marketplace at healthcare.gov, or through your state’s health insurance exchange.
Each state has its own benchmark health insurance plan, which is the plan used to determine premium subsidies (more on those later) as well as the plan that serves as the standard to establish essential benefits. Premiums for benchmark plans vary by state, but for 2024 nationwide the average benchmark premium is $477 per month or $5,724 per year.
How to calculate health insurance costs
Your monthly premiums are only a portion of your overall health care expenses, even when you have insurance. When choosing a health insurance plan, consider these other costs.
Deductible
Your health insurance deductible is how much you have to pay out of pocket for health care services before your insurance will start covering costs.
Let’s say you have a plan with a $2,000 deductible. You’re responsible for all of your health care costs except for certain preventive care services until you reach your deductible. After that, your insurance company covers the costs of care, though you may owe a copayment or coinsurance.
Typical deductibles vary based on several factors, including the type of coverage you have:
Employer-sponsored coverage
The average deductible for an employer-sponsored plan is $1,992 for an individual plan and $3,811 for family coverage.
Marketplace plans
For plans purchased through the Health Insurance Marketplace, the average deductible is $2,825 for single coverage.
Copays and coinsurance
Copayments and coinsurance are what you put toward health care once you reach your deductible. Copayments are flat dollar amounts — say, $25 for a doctor’s visit — while coinsurance is a percentage of the cost of the health care service. Depending on your plan and the type of care, you could owe one or both.
Employer-sponsored coverage
Average copayments are $26 for primary care and $44 for specialty care. The average coinsurance rate is 19% for primary care and 20% for specialty care.
Marketplace plans
For coverage purchased through the Health Insurance Marketplace, your coinsurance could be 10% to 40% of the bill, depending on the health plan category you choose.
Out-of-pocket maximums
The out-of-pocket maximum is how much you have to pay for covered services during the plan year, beyond your premiums. After you spend that amount on deductibles, copayments or coinsurance, your health plan will cover 100% of your remaining costs.
Employer-sponsored coverage
For workplace health insurance plans that are compliant with the Affordable Care Act, the out-of-pocket maximum limits for the 2024 plan year are $9,450 for individual plans and $18,900 for a family plan. The average out-of-pocket maximum for employer-sponsored plans was $4,346 in 2023.
Marketplace plans
For the 2024 plan year, the maximum out-of-pocket limit is $9,450 for an individual plan, $18,900 for a family plan.For high deductible health plans, the 2024 maximum out-of-pocket limit is $8,050 for single coverage and $16,100 for family coverage.
Typical health insurance costs for a single person
| Health insurance type | Average annual premium | Average deductible | Copayment/coinsurance | Out-of-pocket maximum limit |
|---|---|---|---|---|
| Employer- sponsored coverage | $8,435 ($1,401 is the average employee portion) | $1,992 | Copayments: $26 primary care $44 specialty care Coinsurance: | $9,450 |
| Health Insurance Marketplace coverage | $5,724 | $2,825 | Coinsurance: 10% to 40% | $9,450 |
How to choose the best health insurance
There is no right health insurance plan for everyone. “Choosing the right health insurance is highly subjective to the individual, based on their health care needs, risk tolerance, financial situation and how they consume health care,” said Ross Baker, benefits strategist with American Exchange.
“You want to strike a balance between prepaying through premiums for the amount of care you need and limiting your out-of-pocket exposure in the case of a high-cost health care event,” said Baker.
“Cheaper plans typically have coverage gaps, or a very high deductible and maximum out-of-pockets, which can leave you exposed,” he said. “That being said, for some with low health care needs and the ability to cover that higher exposure in a worst case scenario, the cheapest plan can be the best.”
What affects the cost of health insurance?
- Health plan category: When you buy insurance through the Health Insurance Marketplace, you choose between tiers: bronze, silver, gold and platinum. Bronze plans have the lowest monthly premiums, but have higher deductibles, making them best for healthy people who want coverage for worst-case scenarios. On the other end of the spectrum are platinum plans, which have the highest premiums but very low deductibles. They are best for those with chronic health conditions. While an employer-sponsored plan may not go by metal tiers, you similarly may have a choice of plans with higher and lower cost-sharing.
- Network type: Insurance plans can limit you to a certain network of doctors and medical facilities. A Health Management Organization (HMO) is the most restrictive plan since you can only see doctors within the network, and you need a referral to consult with a specialist. By contrast, a Preferred Provider Organization (PPO) offers more flexibility and won’t require referrals. Because of that flexibility, PPO plans tend to be more expensive. “Network has a significant impact on the premium, and this is very important in rural areas where certain providers or facilities can be hours away,” said Baker. “Generally, a thinner network, like an HMO, can save you in monthly premiums, but you will have to decide if that network will meet your health care needs.”
- Employer contributions: If you are eligible for insurance through your employer, your employer will likely cover some of the premiums. On average, workers are responsible for just 17% of the premiums for single coverage, and 29% of the premiums for family coverage.
- Subsidies: If you’re purchasing coverage through the Health Insurance Marketplace or your state’s exchange, you may be eligible for a tax credit that reduces your monthly premiums. These subsidies are based on your income. You can use the calculator at Healthcare.gov to estimate your tax credit.
- Location: Premiums and other costs can vary by location. For example, the average benchmark premium in Vermont was $950 per month. On the other end, the average premium in New Hampshire is just $335 per month.
Buying health insurance
Health insurance is a critical part of staying healthy, but it can be expensive. The good news is that there are some affordable health insurance plans to choose from, and you may be eligible for subsidies to help reduce your costs if you buy an individual plan on the marketplace. When evaluating your options, make sure to consider how often you typically need medical care.
“Start by gaining an understanding of your health care needs and the cost of those needs,” advised Baker. “Health insurance is merely the vehicle we choose to use to pay for health care. Look at things from an annual perspective and evaluate your needs and coverage every year as your life changes. Compare all of your options and find the balance of premium cost and coverage that works for you.”
If you’re overwhelmed or don’t know where to start, a health insurance agent, broker or what’s called an insurance assister can help you identify your needs and evaluate your options. You can find assistance by using the Healthcare.gov searchable database.
How much is health insurance FAQs
On average, a single person pays about $117 a month for employer-sponsored coverage and $477 a month for a plan on the health insurance marketplace, before any subsidies.
In addition to health insurance premiums, a single person will need to consider the cost of health care copayments, coinsurance and spending to meet the health insurance deductible.
Use the Healthcare.gov searchable database to find a health insurance agent, broker or insurance assister who can help you identify your needs and evaluate your options.
You are eligible for Medicare coverage at age 65, but you may be able to get it earlier if you have a disability, ALS or End-Stage Renal Disease.
You can apply for Medicare during your seven-month initial enrollment period, which begins three months before your 65th birthday month and continues three months after your birthday month.
If you enroll in Medicare before the month you turn 65, coverage will start the month of your 65th birthday.
As a seasoned expert in health insurance and healthcare finance, I bring a wealth of knowledge and practical insights into the intricacies of the health insurance landscape. With a comprehensive understanding of the factors influencing health insurance premiums, copayments, coinsurance, deductibles, and the overall dynamics of employer-sponsored plans and individual policies, I can shed light on the critical aspects of this complex domain.
Let's delve into the key concepts covered in the article:
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Factors Influencing Health Insurance Premiums:
- The size of your deductible.
- Whether you get insurance through your job or purchase an individual plan.
- The narrowness of your network (HMO or PPO).
- Availability of subsidies, depending on your income.
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Average Health Insurance Costs:
- A single person pays about $117 per month for employer-sponsored coverage.
- For a plan on the health insurance marketplace, the average is $477 per month before subsidies.
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Employer-Sponsored Plans:
- Average annual premium for individual coverage: $8,435 (2023).
- Average annual premium for family coverage: $23,968 (2023).
- Employee contribution: 17% for single coverage, 29% for family coverage.
- Average annual worker contribution: $1,401 for an individual plan, $6,575 for a family plan (2023).
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Individual Plans (Health Insurance Marketplace):
- Average benchmark premium: $477 per month or $5,724 per year (2024).
- Costs can vary by state.
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Calculating Health Insurance Costs:
- Consider additional costs such as copayments, coinsurance, and deductibles.
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Deductibles:
- Average deductible for employer-sponsored plans: $1,992 (individual) and $3,811 (family).
- Average deductible for Marketplace plans: $2,825 (single coverage).
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Copayments and Coinsurance:
- Average copayments for employer-sponsored plans: $26 for primary care, $44 for specialty care.
- Average coinsurance rates: 19% for primary care, 20% for specialty care.
- Marketplace plans: Coinsurance can range from 10% to 40%.
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Out-of-Pocket Maximums:
- For employer-sponsored plans (2024): $9,450 for individual, $18,900 for family.
- Marketplace plans (2024): $9,450 for individual, $18,900 for family (high deductible: $8,050 and $16,100).
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Choosing the Best Health Insurance:
- Health plan category (bronze, silver, gold, platinum).
- Network type (HMO, PPO).
- Employer contributions.
- Subsidies based on income.
- Location-based variations in premiums.
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Expert Advice on Choosing Health Insurance:
- Consider individual health care needs, risk tolerance, and financial situation.
- Balance between prepaying through premiums and limiting out-of-pocket exposure.
- Cheaper plans may have coverage gaps or high deductibles, requiring careful consideration.
In conclusion, understanding the intricacies of health insurance involves a holistic approach that goes beyond premiums. It requires careful consideration of individual needs, plan categories, and the financial implications of deductibles and out-of-pocket expenses. My expertise enables me to guide individuals through this complex landscape, ensuring they make informed decisions tailored to their unique circ*mstances.
