How Much Does Health Insurance Cost?

So, you want to pull the trigger on getting a health insurance policy, but you’ve got one important question on your mind: How much does health insurance cost? You’ve probably heard lots of stories about people paying an arm and a leg for their policy, and you want to make sure it won’t be the same way for you.

To give you some peace of mind, we’re going to go over the cost of health insurance from every angle. That way, you can get a good idea of how big of a bill to expect—whether you just turned 26 and are off your parents’ plan, you’re in your 30s and self-employed, or you’re just looking for other options besides your employer’s plan.

Because even though health insurance may be expensive, you need it. Sure, you can probably get by paying routine medical expenses on your own, but you won’t be able to absorb the blow of something bigger—like getting your appendix removed or a cancer diagnosis—without insurance.

Let’s dive in!

How Much Does Health Insurance Cost?

The average monthly premium (the amount you pay the insurance company each month) in America for an individual health insurance plan purchased from the HealthCare.gov marketplace is $456, though the price you pay will depend on your age, income, location and whether you use tobacco.¹ The average cost for a family plan if you’re 40 years old and married with two kids is $1,483 (that’s with no financial help from the government).²

Is Employer Coverage Cheaper?

If you or your spouse work for a company or organization that offers its team members an employer-sponsored health insurance policy through a group plan, you likely won’t pay nearly as much as a marketplace plan. In 2022, folks using a company health benefit paid $111 a month for an individual policy and $509 for a family policy .³

How Much Does Private Health Insurance Cost?

Private health insurance refers to both marketplace plans and employer-sponsored plans—basically, all health insurance plans not provided by the government (like Medicare or Medicaid). So, the average monthly costs we just looked at—$456 for a marketplace policy and $111 for an employer-sponsored policy—are also the average costs of private health insurance.

Average Costs of Health Insurance

Even though $456 is the average cost of a monthly health insurance premium for adults in America with a marketplace plan, the amount you pay will probably vary a little bit from that. Your cost will depend on the state you live in, your age, the tier of insurance plan you choose, and some other factors that we’ll discuss later.

For now, let’s take a look at the average costs of marketplace health insurance by state, age and plan tier.

Average Cost of Health Insurance by State

How much does health insurance cost by state? Here’s a look.

Average Cost of Health Insurance by Age

Another factor that affects how much you’ll pay for health insurance is your age. As you age, your health insurance premiums will go up.

Here’s a look at just how much you can expect your insurance costs to rise during your lifetime. These numbers are based on the average marketplace silver plan premiums for a single adult with no dependents who doesn’t use tobacco, makes $60,000, and doesn’t receive financial assistance.

Average Health Insurance Premiums by Tier

When it comes to marketplace health care plans, there are five different levels of coverage—catastrophic, bronze, silver, gold and platinum. These tiers give you different options on how much your plan will pay out versus how much you’ll pay. They do not affect the quality of care you have available.

The two least common plans among those options are catastrophic and platinum, since they’re both on the extreme ends of the spectrum. Catastrophic plans are the cheapest and provide bare minimum coverage—they have the highest out-of-pocket costs. With platinum insurance, the insurance company pays 90% of your health care expenses, but that means they’re the priciest plans out there.

Most folks go for a bronze, silver or gold metal tier. Bronze plans give you lower monthly premiums, but more out-of-pocket expenses. Silver offers lower deductibles (the amount you have to pay before the insurance company steps in) and out-of-pocket costs than Bronze, but you’ll pay more in monthly premiums. Gold plans have high monthly premiums but low deductibles, coinsurance and out-of-pocket costs.

Here’s a look at the average cost of health insurance for an individual based on monthly premiums for Bronze, Silver and Gold plans:

Average Cost of Health Insurance for a Family of Four

Wondering how much marketplace health insurance costs for a family of four? Well, the answer depends on the age of both parents and both children. So, to help you get an idea of what the costs might look like for your family, here are some examples.

The numbers are based on families with a $100,000 household income who don’t use tobacco or receive financial assistance.⁷

Factors That Influence Health Insurance Costs

Now that we’ve crunched the numbers on how much you can expect to pay for health insurance, let’s look at the factors that influence health insurance costs.

In general, a handful of economic factors affect health insurance costs across the U.S., like inflation or the current market environment. For example, when inflation is on the rise and the prices of goods and services across the country go up, health insurance costs go up too.

But when it comes to your specific cost of health insurance, you’ll find a few personal factors come into play.

What Affects My Health Insurance Premium Costs?

Let’s start with the five factors that insurance companies are legally allowed to consider when deciding how much you’ll pay for a marketplace plan.

• Age: You can expect to pay more for health insurance on the marketplace as you get older, like we saw when we compared prices above.

• Location: Some states are more affordable when it comes to health insurance, and others are more expensive. For example, the average premium in New Hampshire is just $323, but it’s a whopping $802 in Wyoming.⁸

• Tobacco use: If you use tobacco, health insurance companies can charge you more.

• Individual vs. family enrollment: The more folks you have on your plan, the more expensive it’ll be.

• Plan category: As we saw in the last section, the price of your insurance plan will depend on the level of coverage you choose—catastrophic, bronze, silver, gold or platinum. Within those five plan categories are some other, more specific types of insurance plans that we’ll go over later.

If it’s not on this list, then insurance companies aren’t allowed to account for it when determining how much you’ll pay for a policy. That includes your gender, medical history (preexisting conditions) and current health.⁹

Other Cost Factors

Now, while those are the only factors insurance companies can base your price on, some other things influence health insurance cost that are outside your provider’s control. The two biggest are:

• Your income level: When you buy a marketplace health insurance plan, the federal government will pay for part of the cost—and the amount they pay depends on your income. The less you make, the more the government will cover. This only applies, though, if your employer does not offer you a health plan.

• Your employer’s size: If you’re using an employer-sponsored health plan, the amount you pay will depend on the size of your employer. The average deductible at a small company is $2,543, and the average deductible at a large company is $1,493.¹⁰ 

Different Types of Plans

Shopping for a health insurance plan can sometimes feel like being in a grocery store and staring at rows of the same product for what seems like hours—only it’s less exciting and way more expensive than the cereal aisle! But comparing plans could save you money. This is because the type of plan you choose also affects your health insurance costs.

Here are the types of plans and networks you can shop for in the health insurance marketplace:

• Health maintenance organization (HMO): HMO plans limit you to doctors within a certain network. They’re usually the strictest plans but can have lower premiums.

• Preferred provider organization (PPO):  PPO plans are similar to HMOs but give you a little more flexibility. You’ll pay less for medical care if you use a provider within the plan’s network, and they typically come with a copay. You are allowed to access out-of-network providers, but they’re more expensive. 

• Exclusive provider organization (EPO): EPO plans limit you to in-network providers except for emergencies.

• Point of service (POS): POS plans offer benefits like lower medical bills if you use doctors, hospitals and health care providers in the plan’s network. Keep in mind you’ll need a referral from your primary care doctor in order to see a specialist.

• High-deductible health plan (HDHP): HDHP plans are exactly what they sound like. You have a higher-than-normal deductible and pay most costs out of pocket until you hit the deductible, but you get much lower premiums. You can also use pretax Health Savings Accounts (HSAs) with these.

• Short-term plan: Short-term plans are temporary health insurance policies that bridge the gap when you’re between jobs. They’re usually from three months to just under a year.

• COBRA plan: Not to be confused with a deadly snake, COBRA plans are similar to short-term plans but last longer. They help you prevent a gap in your coverage if you lose your job.

• Catastrophic plans: Catastrophic plans mostly apply to young adults under the age of 30. They have lower premiums and high deductibles.

Is Health Insurance Getting More Expensive?

It certainly feels like it. And it’s true that over the last decade, health care costs have risen significantly. The average individual is paying 67% more in their premium in 2023 versus 2014 according to the Kaiser Family Foundation. But compared to 2019, the cost is actually down 5% in 2023. And premiums only rose 4% from 2022 to 2023.¹¹

How to Get the Best Health Insurance

If you’re looking to purchase health insurance on your own, you could just go to the websites of major health insurance companies in your area and see what plans they provide. But let’s face it: That’s a ton of work. Choosing the right health insurance plan for you or your family is a daunting task, and you probably have better things to do with your time than sift through endless health insurance quotes.

That’s why we recommend our friends at Health Trust Financial for your health insurance needs. They're RamseyTrusted and will connect you with an agent who can look at your situation and compare the best rates so you get the coverage you need. They’ll help you understand the marketplace or even what your employer is offering. And the best part? It's free to connect!