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How Much Does Health Insurance Cost?

Health insurance is one of the foundations of a financially stable life. However, with the rising cost of policy premiums, it’s more important than ever to choose your insurance plan carefully. In other words, you have to make sure you’re­­ not paying for more than the coverage that you need.

Today’s post addresses the question, “how much does insurance cost?” We’ll look at both individual and group plans, then give tips on lowering the average health insurance cost per month without sacrificing essential coverage.


How Much is Health Insurance for Groups?

Group insurance is a policy plan that covers an entire organization or company. A business owner usually secures it for his or her employees. The total payable premium changes depending on the number of people on the plan, so costs will fluctuate as you hire or remove employees.

The average monthly health insurance cost for single coverage employees on group policies is $574 per month. Family coverage averages $1,634 per month. On average, this is more expensive than individual health plans.


How Much is Health Insurance for Individuals?

If you buy an insurance policy on your own (and don’t rely on the one given by your company), this is called an individual health insurance plan. Even if you include your family in the coverage, it’s still an individual plan as long as you applied for it yourself.

Individual health insurance has seen a drastic increase in premium costs, rising as much as 123% over the years. Despite this, individual policies are still cheaper overall compared to company-sponsored policies. The average health insurance cost per month for individual plans is around $388. Family plans, on the other hand, are around $1,520 per month.


Factors That Affect Health Insurance Cost

So how much is health insurance? This will always depend on your life situation. Insurance companies compute your premiums and coverage based on a myriad of variables, from your general health to your state of residence.

Here are some factors that affect your health insurance monthly cost:


Pre-Existing Conditions

By law, health insurance companies can’t deny you coverage, limit benefits, or jack up your premiums because of a pre-existing condition, which is a chronic disease or illness that you had before getting the policy.

However, if you have a pre-existing condition, you may opt for a higher-premium plan, which does increase your costs. These plans have higher monthly premiums because the insurance pays a more significant chunk of your ongoing medical expenses due to your condition.


Health Care Type

Your chosen health insurance category often has the most significant influence on how much your costs are.

When you buy health insurance from government exchanges as mandated by the Affordable Care Act (ACA), you’ll encounter four (or sometimes six) different categories. They range from Bronze (lowest premiums) to Platinum (highest premiums).

When you pay a higher monthly premium, you’ll pay fewer out-of-pocket costs because the insurance policy covers most of these. Conversely, plans with lower premiums will cost you more when you need prescriptions or doctor visits.

For example, the Platinum plan with a monthly premium of $732 covers most of your routine medical procedures, while a plan with a monthly payment of $448 might cost you more in out-of-pocket expenses.


Location by State

The state where you live greatly influences your monthly premium. The cost of living in your area, and even the competition from other insurers in your city, affect the prices of health care.

What’s more, some states have laws for specific situations that affect your premiums. For instance, in most states (except California and New York), your provider can charge you up to 50% more if you’re a smoker.


Tips for Lowering Your Average Health Insurance Cost

Now that you know the answer to the question, “how much is health insurance a month?” you’ll probably be asking, “is there a way to lower it?”

While you can’t control your medical needs, you can find ways to pay less for insurance costs.


Check other health coverage programs

Aside from an insurance policy, there are other plans you can rely on for healthcare coverage. Two of the most well-known are Medicaid and Medicare. If you qualify for either of these, they will pay for a big chunk of your medical bills that your insurance won’t cover.


Check on government subsidies

Some government programs offer payment assistance and subsidies for qualified individuals to help them afford their health insurance plans. One good example is the Cost-Sharing Reductions (CSR), which lowers your deductible and copayments.


Get a health savings account (HSA)

A health savings account, or HSA, allows you to put in tax-free or tax-deductible funds. You can then use that money to pay for any medical costs not covered by your insurance plan, without having to pay taxes on that income.

With the right strategies, you can get health insurance for less while covering your essential medical needs. However, costly health care often creates looming debt for many individuals across the country.

If you’d like to learn more about effectively tackling debt, contact our debt relief experts today.