This guide is for individuals interested in buying health insurance for themselves or for their families, and who want to know how much health insurance costs. We’ll compare various options and show how much you can expect to spend on a health insurance policy.
Need help choosing a policy? Read our How To Choose A Health Insurance Policy Guide.
We start this article by giving you the costs for a single individual policy, and then show you how to estimate your costs if you need to insure multiple members of your family.
Before we dive into the details on this topic, if you are looking for the best health benefits package for your employees, we suggest you check out Gusto. Gusto will look at hundreds of health plans and offer you the best choices for your budget and your employees. Visit Gusto and schedule a free demo.
Obamacare Individual Health Insurance Premium Costs
Per Month Health Insurance Premiums for Single Coverage
*Subsidy not included (explained below)
The chart above is the average monthly premiums for health plans on the individual Obamacare exchange. To roughly estimate the cost for a family, do the following:
- To add a spouse just use the table a second time.
- Each child policy will cost approximately 60% of a 21 year old policy.
How We Came Up With This Table
The two main factors which determine the cost of an individual health insurance policy are your age and the level of coverage you choose.
Bronze, silver and gold are used by the health insurance industry to describe the level of coverage and the actuarial value of a plan. What is the actuarial value? It is the average % of health costs covered by the insurance company (including deductibles, co-pays and co-insurance,) averaged out over all policyholders within that category. The rest is paid by the policyholders.
Keep in mind that this is the average for all policyholders. How much you pay in additional costs if/when you need healthcare, is going to depend on the deductible, copay, and coinsurance levels of the plan that you choose. In general however, Bronze plans will have the highest out of pocket costs (deductable, co-pay, and co-insurance), and Platinum plans will have the lowest. Silver and gold plans will be somewhere in between.
Percentage paid by insurance
Silver level plans are the most popular, with 65 percent of Americans choosing these middle-of-the-road policies, followed by bronze then gold. For more about these levels, see our guide to choosing a health plan.
Health Insurance Cost Subsidies
The chart above doesn’t show what you can potentially save on your premiums and out of pocket costs through government subsidies. Families that earn below 400% of the poverty level (which was $46,680 for an individual or $95,400 for a family of four in 2014) might be eligible for a subsidy that effectively reduces your monthly premium and out of pocket costs. The rate is determined on a sliding scale depending on your income.
Here’s some examples:
A person who is single and earning $25,000 a year would get about 40 percent of their premiums covered by the subsidy. Also, if they choose a silver plan, about 73 percent of their medical expenses will be covered, as opposed to the typical rate of 70 percent.
A family of 4 earning $50,000 would get about 60 percent of their premiums covered by the subsidy. Also, if they choose a silver plan, about 73 percent of their medical expenses will be covered, as opposed to the typical rate of 70 percent.
To see if you qualify for a subsidy and to see how much you can save, use this calculator:
Health Insurance Cost Subsidy Calculator
Other Things To Keep in Mind
LOCATION: The rates above above were gathered from the Obamacare website: Healthcare.gov. We compared Obamacare rates against eHealth, the largest private health insurance exchange, and found that Healthcare.gov generally has the best rates. However, because of how prices fluctuate across the country, eHealth actually had the advantage in some counties. When you start looking around for health plans, you should maximize your options by checking both websites. See eHealth Sample Rates and Obamacare Sample Rates.
TOBACCO USE: If you use tobacco, insurance companies can add a surcharge of up to 50 percent to the cost of your health insurance premiums. Not all insurers do this and in some states, the practice is actually banned (including California, New York, New Jersey, Massachusetts, Rhode Island, Vermont and District of Columbia.) If you use tobacco, however, and don’t live in one of those states, ask insurers if they apply a tobacco surcharge to avoid any unexpected costs.
Need help choosing a policy? Read our How To Choose A Health Insurance Policy Guide next.
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