How Much Does Health Insurance Cost?

The global pandemic has many of us rethinking our health insurance coverages. If you have been putting off buying or changing your insurance, you may be wondering how much insurance costs and, more importantly, whether you can afford it.

Luckily, several programs can help you lower the cost of health insurance.

What is the average cost of health insurance?

According to the consumer-information website ValuePenguin.com, which pulled data from the Centers for Medicare & Medicaid Services, the average monthly cost of health insurance in the U.S. is $495, based on a 40-year-old participant. However, a range of factors — including age, location, family size, and coverage level — will determine your insurance costs.

Does your gender affect costs?

No, under the affordable care act (ACA), insurance companies cannot charge men and women different rates for the same plan.

Do married couples pay less?

Marriage is considered a qualifying life event that permits you to make changes to your insurance coverage. You have 60 days from tying the knot to modify your plan or add your spouse. Otherwise, you will need to wait until open enrollment to update your marital status.

The decision to maintain separate policies or join your spouse’s plan should not be taken lightly. Having individual plans can affect your family’s out-of-pocket maximums. You should speak with a qualified health insurance broker and compare your options before making a decision that can affect your health and wealth.

What about families?

Family plans are typically more costly than individual plans and have higher out-of-pocket maximums. However, if you purchase your own health insurance, you may be eligible for the Advanced Premium Tax Credit that may lower your monthly payment. Additionally, you may be able to fund a Health Saving Account that allows you to receive a tax deduction and potentially build wealth.

What affects my premium costs?

Under the Affordable Care Act (ACA), insurance companies may only consider five factors when establishing health insurance premiums:

1. Age: Insurers may only charge older individuals a maximum of three times what they charge younger insureds.
2. Location: Where you live has a significant effect on your premiums. The cost of living, available competition, and state regulation can all affect health insurance costs.
3. Tobacco use: If you haven’t given up your tobacco usage, the ACA allows insurers to charge tobacco users up to 50% more than non-users.
4. Individual vs. family enrollment: Insurance companies may charge more for plans covering a spouse and/or dependents.
5. Plan category: There are five plan types: Bronze, Silver, Gold, Platinum, and Catastrophic. Each has different costs and coverages.

How to get a health insurance quote?

If an employer-sponsored plan does not cover you, you may shop for your own health insurance. Your options included purchasing a plan directly with an insurance company, working with a broker, or purchasing a plan via the federal marketplace if you are eligible.

The federal marketplace

One option for purchasing health insurance is to visit the federal or your state marketplace. The Federally Facilitated Marketplace is an organized marketplace for health insurance plans operated by the U.S created as part of the Affordable Care Act.

What is the Affordable Care Act?

The Affordable Care Act (ACA) attempts to make healthcare more reasonably priced. It established exchanges where individuals can compare eligible plans, features, and costs.

The ACA also created the Premium Tax Credit, which essentially subsidies for individuals and families with a taxable income of no more than 400 times the federal poverty level. There’s an additional, but lesser-known, subsidy for individuals and families that make no more than 250 percent of the federal poverty level and choose a Silver plan.

How did the ACA begin?

The Affordable Care Act (ACA) was enacted in March 2010. It’s also known as the Patient Protection and Affordable Care Act or Obamacare. The law had three goals: to make affordable health insurance available to more people, to expand Medicare to cover more adults, and to support medical innovation. 

Who can purchase insurance under the ACA?

You may be able to buy insurance on the marketplace if you live in the U.S., are a U.S citizen, and are not incarcerated.

What you need to know about the marketplace

The marketplace website is where you go to compare and sign up for an ACA policy. The website will ask you a series of questions to determine your eligibility for coverage and indicate which policies are available to you.

You will need to be prepared with an estimate of your annual income. If you overstate your income, you may receive additional Premium Tax Credit when you file your federal income taxes. If you underestimate your income, you may end up owing money to the IRS.

Keep in mind that the marketplace will only show you the plans that you’re eligible for based on your responses to the questions. The marketplace website does not offer any predictive tools, nor will it allow you to model or forecast changes in your income.

Alternatively, you may engage the help of a federal marketplace facilitator or navigator. These individuals are trained to understand how the marketplace works. They are not allowed to render any advice on taxes, the law, or finances.

What plans are available, and what do they cover?

The plans sold on the marketplace (exchange) must be comprehensive, cover doctors’ visits, hospitalization, prescription drugs, and maternity care without restrictions for preexisting conditions. Insurers cannot charge you a higher premium because of your gender or your medical history. Insurers offering policies on the exchange may only vary premiums based on the number of people covered in your family, their ages, and whether you use tobacco products.

The ACA uses a metal system, like in the Olympics, to make comparison shopping easier. Bronze plans will tend to have a lower annual premium and higher out-of-pocket expenses; a gold plan will have higher premiums and lower out-of-pocket expenses each year; and a silver plan will generally fall within the middle, with one exception.

How to choose the right health insurance provider?

Picking the right plan and provider can be a difficult decision. You need to consider the type of plan that’s most appropriate for you and your family, eliminate plans that exclude your doctors and healthcare providers, and determine which level of coverage and deductible you can afford. When comparing your options, it would be best to work with a qualified professional to help you select the right plan and provider for your needs.

Where to find help?

Medicareplan.com

Medicareplan.com is an insurance brokerage that can work with you to find ACA plans and short-term health insurance plans. Medicareplan.com IQ is a wholly owned subsidiary of Prudential Insurance, a Fortune 500 company and one of the oldest and most trusted insurers in the U.S.

CoverRight

Navigating your insurance options once you turn 65 is an arduous task because you face an alphabet soup of available options. Luckily, CoverRight can assist you in finding the best option. CoverRight is one of the leading brokers of Medicare supplemental and Medicare Advantage plans. 

Americo

America is an insurance company that has been in business for more than 100 years. it has an “A” (Excellent) rating by A.M. Best, the most trusted rating agency for insurance matters. American has a team of representatives that can help you find the best coverage for you and your family's needs.

Choose the right plan for you

Health insurance is a crucial line of defense to protect you and your family. However, picking out the right plan for you and your family can be intimidating. Deciding on the level of coverage or whether you want an HMO, PPO, EPO, or POS can leave your head spinning. The good news is that you don’t have to make these decisions alone.

Reach out to a qualified professional who can explain each plan's features and benefits, and you may be surprised to learn that healthcare insurance can be more affordable than you may think. To compare providers, visit our comparison chart.