- INSURANCE
- HEALTH INSURANCE
Where you live and work are just two factors that influence the price
Health insurance is necessary and yet can be a financial strain, with monthly premiums from an Affordable Care Act (ACA) plan for an individual averaging $477.
However, your costs could be higher or lower depending on factors you can’t change (such as your age) and some factors you might have control over (such as your selected coverage level or which health insurance company you choose). If you are eligible for an employer or government plan, your monthly costs should be far lower than if you have to bear all the costs yourself either with an ACA plan or on the open marketplace.
Learn more about health insurance costs below.
KEY TAKEAWAYS
- Health insurance costs depend on how you get your coverage and factors such as age, insurance company, family size, where you live, Affordable Care Act (ACA) metal level, and plan type.
- Individual monthly insurance costs range widely, from $12 for TRICARE to $1,758.16 for a 60-year-old on a platinum ACA plan.
- For ACA plans, monthly premium costs increase with age, family size, and metal tier. Premiums are also higher if you smoke or choose a plan with more provider choices (such as a PPO).
What Is Health Insurance?
Health insurance helps partially cover the cost of medical care in exchange for a monthly premium or payment. According to a 2023 Census survey, 92% of Americans had health insurance at some point during the year.
Employer-provided health insurance covers 55% of the insured population. Ten percent have a plan purchased from a private company, or through the ACA Marketplace or a state health insurance exchange. Around 36% of the population has health insurance through the government, which includes:
- The 19% on Medicaid
- The 19% on Medicare
- The 2% on TRICARE, which covers active military service members and their families
- The 1% on VA and CHAMPVA, which covers veterans and their family members
How Much Does Health Insurance Cost Per Month?
One of the most significant factors influencing the cost of your health insurance is where you get it. An ACA plan purchased on the healthcare exchange is generally far more expensive than a plan you get through your employer or a government program such as Medicare or Medicaid. However, it may be cheaper than an individual plan bought on the open marketplace, and if you qualify for a premium tax credit due to your income, you may pay a far lower premium for your Health Insurance Marketplace plan.
Note
Compared to the 18.2 million enrolled in an ACA plan, only around 2.5 million people purchased individual plans from off-Marketplace providers as of early 2023, according to the most recent estimates from KFF (formerly the Kaiser Family Foundation). These plans include short-term health insurance and plans that don’t comply with the ACA due to grandfathering.
Even within employer plans, differences exist. The average employee at a private, for-profit firm contributes more for their healthcare coverage (19%) than a public organization employee, who contributes 13%.
For the remainder of the cost survey, we’ll dive deeper into ACA and exchange plans to learn more about how costs are influenced by such factors as age and where you live.
How Much Does Health Insurance Cost by Age?
Health insurance purchased from the ACA heavily relies on several variables. Age is a major factor, as insurance companies are allowed to raise rates based on age. Young insurance enrollees benefit from the lowest monthly health insurance costs, no matter their health status. As you can see from the chart above, the monthly cost for a 60-year-old is about twice that for a 40-year-old.
How Much Does Health Insurance Cost by Plan Type?
Health insurance costs also depend on the type of insurance you buy. Plans with the least choice use HMOs (health maintenance organizations) and EPOs (exclusive provider organizations). For these plans, you primarily must work within the insurer’s network and see a physician who acts as a gatekeeper for your care. Preferred provider organizations (PPOs) and point-of-service (POS) plans offer more choice—but cost more, too. If cost containment is your top priority, an HMO provides the lowest monthly pricing.
How Much Does Health Insurance Cost Per Company?
Health insurance costs can also vary by company. When we compared pricing from eight different companies across two ZIP codes in Florida and Texas, we found the following average premiums.
As you can see, Kaiser Permanente and Aetna offered some of the lowest premiums. The highest premiums were found at UnitedHealthcare and Cigna. But keep in mind that your premium isn't the only consideration when you're looking for affordable health insurance. Your deductible and the amount you have to shell out for copays or coinsurance also are factors when you need to get care.
How Much Is Health Insurance by Metal Tier?
The metal level of your plan determines how you split healthcare costs with your insurance company. In general, bronze and silver plans offer lower monthly premiums, but you’ll pay a higher percentage of out-of-pocket healthcare costs on an ongoing basis. Gold and platinum plans charge the highest premiums, but you won’t pay as much every month in copays and coinsurance.
Catastrophic plans are the least expensive but are only available to applicants under 30 or people experiencing extreme financial hardship. You’ll also have very high deductibles and more limited coverage. These plans have the lowest monthly premiums of all plan types but also don’t qualify for cost-sharing or premium reductions.
Average Cost of Health Insurance by Location
The highest premiums were found in Vermont, Alaska, West Virginia, Wyoming, and New York. The lowest premiums were found in New Hampshire, Minnesota, Maryland, Virginia, and Michigan.
States with premiums closest to the national average of $477 were Texas, Wisconsin, Illinois, New Mexico, and California.