How much does the average american pay for healthcare

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The cost of health insurance in the Affordable Care Act (ACA) marketplace varies by insurance company, where you live, which plan you choose, how many people are covered, your age, whether you smoke and your household family size and income.

What Are Average Health Insurance Costs?

The average monthly premiums for a Bronze ACA health insurance plan is $928. The average monthly costs increase to $1,217 for a Silver plan and $1,336 for a Gold plan. Those averages don’t take into account premium tax credits and subsidies that can reduce costs for an ACA plan based on household income.

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Here’s a look at the average ACA marketplace health insurance premiums for four of the biggest health insurance companies.

Average cost of health insurance by company

Average cost of health insurance by age

Average cost of health insurance by plan type

Average cost of health insurance by metal tier

How to Calculate and Compare Health Insurance Costs

Choosing the best health insurance plan for you involves assessing your budget, your current health, what you expect in the next year and what you want from a health plan.

Premiums vs. deductibles

Health insurance plans generally have higher premiums/lower deductibles or lower premiums/higher deductibles. What you choose influences how much you’ll pay in premiums each month and how much you’ll pay out-of-pocket when you need health care.

A health plan with a high deductible could be a good choice if you don’t expect to need much care over the next year. Health insurance companies don’t start chipping in to pay for health care services until you reach your deductible. Once you hit your deductible, you generally pay coinsurance, which is when you and the health insurance company share the costs of health care services.

For example, this could mean you paying 20% and the health plan paying 80% until you reach your plan’s out-of-pocket maximum.

When choosing a health plan, calculate how much you would pay in health insurance premiums over a year and consider the deductible. Would lower premiums save you enough that it would be worth paying a higher deductible? Or can you afford higher premiums with the understanding that you’ll save money if you need care during the year?

If you expect to need health care services, especially if you’re expecting a child or planning a surgery, a health plan with a higher premium and lower deductible might make sense. But if you don’t expect to need many health care services, a high-deductible health plan could be a good choice.

If you’re looking for an ACA plan, Bronze and Silver plans have higher deductibles but you pay less in premiums than you would for a Gold or Platinum plan. Gold and Platinum plans have higher premiums but you pay less out-of-pocket when you need care.

Plan benefit design

A plan’s benefit design influences your flexibility and cost you pay for health insurance. HMO and EPO plans are the most common types of health insurance plans found in the ACA marketplace. PPO and point of service (POS) plans are also offered on the ACA exchanges, but aren’t nearly as common on the marketplace.

Here’s a look at the differences between the four benefit designs:

Health plan benefit design differences

HMOs and EPOs typically have the lowest premiums, but they also don’t allow out-of-network care. Those plans generally only pay for out-of-network care if it’s an emergency. HMOs and EPOs otherwise require that you stay within your provider network. HMOs also often demand that you get primary care provider referrals to see a specialist.

PPOs and EPOs typically let you get care outside of your provider network, but at a higher cost than if you got in-network care. That flexibility often comes with higher premiums, too.

Decide how much flexibility you want and whether you’re willing to pay more for cover for it. If you want the cheapest health insurance and don’t mind staying in the provider network, a HMO or EPO might be a better bet.

Factors That Influence Health Insurance Costs

The ACA lets health insurance use multiple factors when setting health insurance premiums. Here’s what influences costs on the ACA marketplace.

Your age

ACA marketplace insurance companies use a person’s age when setting rates, which is different from the employer-sponsored health insurance market. Here’s a look at how a person’s age influences a health plan’s cost.

Average ACA marketplace plan costs by age

Where you live

Your location influences how much insurance companies charge. Insurers in states that have fewer health insurance plans on the marketplace may charge more for coverage since there are fewer companies to share the cost of providing health insurance in that area.

Rural areas may have fewer health plan options, so people in those regions may pay more for care than those in urban and suburban areas.

Whether you smoke

The ACA lets insurance companies set higher rates for smokers in the marketplace. A health insurance company can charge as much as 50% more to a smoker than a nonsmoker.

Metal tier

Metal tiers on the ACA marketplace help consumers choose plans based on costs. The metal tiers are Bronze, Silver, Gold and Platinum.

Bronze and Silver, which have lower premiums and higher deductibles, make up most ACA health plans. Gold health plans have higher premium costs than either Bronze or Silver plans but lower out-of-pocket costs. Platinum plans, which have higher premiums and low deductibles, comprise a tiny fraction of ACA plans.

The metal tier you choose depends on whether you want to pay higher premiums or higher deductibles.

How many people are covered

Having single coverage costs less than if you have multiple people on your health plan. Here is how adding people to your health plan affects health insurance costs.

Average ACA marketplace plan costs by number of people on plan

Type of health plan

A health plan’s benefit design affects costs and how you get care.

HMOs and EPOs generally have the lowest premiums but you must stay within the plan’s provider network. Health insurers generally won’t cover non-emergency care you get out of network in an EPO and HMO. You instead have to pick up all the costs.

PPOs have the most flexibility to get care outside of your network and you don’t need to name a primary care provider or get referrals to see specialists.

You need to decide whether flexibility or lower premiums are more important to you if you’re comparing a PPO with an HMO or EPO.

Your household income

The ACA marketplace offers premium tax credits and cost-sharing subsidies based on your household income. That can save you money on your premiums and out-of-pocket costs.

People with household income at 400% of the federal poverty level or below are eligible for premium tax credits. Those with Silver plans may also get cost-sharing subsidies that reduce out-of-pocket costs.

The ACA marketplace will take into account those factors when you enter your household income and family size into the exchanges site.

Here’s what constitutes a 400% federal poverty level in 2022.

What’s considered 400% federal poverty level

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Frequently Asked Questions About the Cost of Health Insurance

How do I find an affordable health insurance plan?

You can enter your household income information into the ACA marketplace website, which can help you find an affordable health insurance plan if your income qualifies.

ACA marketplace plans are eligible for premium tax credits and cost-saving subsidies, which can lower the cost of health insurance.

You may also qualify for Medicaid, which is a federal/state health insurance program that offers comprehensive, low- or no-cost coverage. The ACA marketplace site will let you know if you qualify for Medicaid in your state when you include your household income and family size into the exchanges website.

How much does health insurance cost per month for a single person?

The average monthly health insurance cost for a Bronze plan is $356 for a single 30-year-old person. That same person pays an average of $468 for a Silver plan and $514 for a Gold plan.

A 40-year-old single person pays $401 on average each month for a Bronze plan, $526 for a Silver plan and $578 for a Gold plan.

Age is just one factor that health insurance plans use when setting rates on the ACA marketplace.

What can you expect to pay for health insurance deductibles?

The average health insurance deductible for an ACA marketplace plan is slightly more than $5,000.

Most ACA plans are either Bronze or Silver plans, which have deductibles that are often over $2,000. You may find a lower deductible plan, such as $1,000 or less, on the Gold tier, but those health plans come with higher premiums.

How much does the average American pay for healthcare per month?

How much does the average American spend on healthcare per year?