Health insurance is essential, yet it can impose a significant financial burden, with monthly premiums for an individual Affordable Care Act (ACA) plan averaging $477.However, your expenses could vary based on unchangeable factors like age and adjustable factors such as chosen coverage level or selected insurance provider. If you qualify for an employer-sponsored or government plan, your monthly costs will likely be much lower than if you purchase an ACA plan or insurance through the open market.For a deeper understanding of health insurance costs, read below.
Key Takeaways
- Health insurance costs are influenced by how you obtain coverage and factors like age, insurance provider, family size, location, ACA metal level, and plan type.Individual monthly insurance costs range significantly, from $12 for TRICARE to $1,758.16 for a 60-year-old on a platinum ACA plan.For ACA plans, monthly premiums rise with age, family size, and metal tier. Premiums are also higher for smokers or those choosing plans with more provider options, such as PPOs.
What Is Health Insurance?
Health insurance offsets a portion of medical care expenses in exchange for a monthly premium. According to a 2023 Census survey, 92% of Americans had health insurance at some point during the year.Employer-sponsored health insurance provides coverage for 55% of the insured population. Ten percent have coverage through plans purchased privately, via the ACA Marketplace, or through state health insurance exchanges. Approximately 36% of the population receives health insurance from government programs, including:
- 19% on Medicaid19% on Medicare2% on TRICARE, which covers active military service members and their families1% on VA and CHAMPVA, which covers veterans and their family members
How Much Does Health Insurance Cost Per Month?
Average monthly premium for one person, rounded to the nearest dollar
A major determinant of your health insurance cost is the source from which you obtain it. ACA plans purchased on the healthcare exchange are typically more expensive than those provided by employers or government programs like Medicare and Medicaid. However, they may be more affordable than individual plans bought on the open market. Additionally, if you qualify for a premium tax credit based on your income, your premium for a Health Insurance Marketplace plan could be significantly reduced.
Note: As of early 2023, about 18.2 million people were enrolled in an ACA plan, while only around 2.5 million purchased individual plans from off-Marketplace providers, according to the latest estimates from KFF (formerly the Kaiser Family Foundation). These off-Marketplace plans include short-term health insurance and non-ACA-compliant plans due to grandfathering. Even within employer-sponsored plans, there are cost variations. Employees at private, for-profit firms typically contribute more to their healthcare coverage (19%) compared to public organization employees, who contribute 13%.For the remainder of this cost survey, we will delve deeper into ACA and exchange plans, exploring how factors such as age and geographic location influence costs.
How Much Does Health Insurance Cost by Age?
| Member Age | Monthly Cost |
| Age 18 | $383.04 |
| Age 21 | $428.51 |
| Age 27 | $450.20 |
| Age 30 | $487.19 |
| Age 40 | $548.29 |
| Age 50 | $766.43 |
| Age 60 | $1,163.90 |
Health insurance obtained through the ACA is significantly influenced by several variables, with age being a primary factor. Insurers are permitted to adjust rates based on age, resulting in younger enrollees enjoying the lowest monthly premiums regardless of their health status. As illustrated in the chart above, the monthly premium for a 60-year-old is approximately double that of a 40-year-old.
How Much Does Health Insurance Cost by Plan Type?
Health insurance costs are also influenced by the type of plan you choose. Plans with the least flexibility, such as HMOs (health maintenance organizations) and EPOs (exclusive provider organizations), require you to stay within the insurer’s network and often mandate that you see a primary care physician who acts as a gatekeeper for your care. On the other hand, preferred provider organizations (PPOs) and point-of-service (POS) plans offer greater flexibility but come with higher costs. If minimizing expenses is your primary concern, an HMO typically offers the lowest monthly premiums.
Health insurance costs can also differ between companies. By comparing prices from eight different insurers across two ZIP codes in Florida and Texas, we observed the following average premiums.
As illustrated, Kaiser Permanente and Aetna provided some of the lowest premiums, while UnitedHealthcare and Cigna had the highest. However, when seeking affordable health insurance, it’s important to consider more than just the premium. Factors such as your deductible and out-of-pocket costs for copays or coinsurance also play a crucial role when accessing care.
How Much Is Health Insurance by Metal Tier?
The metal level of your plan dictates how healthcare costs are shared between you and your insurance company. Generally, bronze and silver plans have lower monthly premiums but require higher out-of-pocket expenses for healthcare services. Conversely, gold and platinum plans come with higher premiums but lower monthly costs for copays and coinsurance.Catastrophic plans are the least expensive option, available only to individuals under 30 or those facing significant financial hardship. These plans have the lowest monthly premiums but come with very high deductibles and limited coverage, and they do not 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.1
