1. Introduction
Some people expect the services of an insurance that covers health to be extremely costly, but this is not always the case. The amount of money one can be charged to cater for health insurance in a month depends on age, geographical area of residence, type of insurance as well as whether one is eligible for the government subsidies. In some cases, people spend as little as $10, while a particular month might cost more than $ 500. This allows you to know what influences your premium and thus find the most suitable plan.
If you have ever typed on the search field, “How much health insurance per month?” then you are at the right place. In this guide, we will discuss and explain what is the average cost of health insurance, various categories of health insurance, and what can affect the price. Let’s dive in!
2. How Much Is Health Insurance a Month? (2024 Overview)
2.1 Average Monthly Cost of Health Insurance in the USA
The cost of health insurance is usually influenced by the kind of plan chosen, state and some other factors individual to the subscriber. However, here is a general guideline of what it may cost you in terms of charges in the month of January 2024.
- Individual health insurance: Around $477/month
- Family health insurance: Around $1,214/month
- Employer-sponsored health insurance: The premium for this is usually range from $120 to $150 each month
- Short-term health insurance: As low as $100/month
- Medicare: Part B costs around $174.70/month in 2024
- Medicaid: May possibly be offered at $0 or at a very minimal contribution in cases where necessary
As has been mentioned these are average numbers only and they may vary depending on various factors. The actual cost would vary with factors such as the age of the person, health state and the geographical location.
2.2 Breakdown of Monthly Premiums for Different Plans
There are, in general, different categories and each of them comes with different cost structure:
HMO (Health Maintenance Organization) Plans
- Lower monthly premiums
- Requires referrals to see specialists
- Switching is limited only to selected doctors in the network.
PPO (Preferred Provider Organization) Plans
- Higher monthly premiums
- Unlimited visit to any physician both in-network as well as out-of-network.
- No referrals needed for specialists
High-Deductible Health Plans (HDHPs)
- Lower monthly premiums
- They are classified by the out of pocket costs that a patient has to bear before accessing health insurance coverage which entails;
- HSA compatible as a way to get tax benefits
Catastrophic Health Insurance
- Lowest monthly premiums
- High deductibles (often over $8,000 per year)
- Suitable for people below 60 years old with minimal complications.
2.3 Factors Affecting the Cost of Health Insurance per Month
The following are the determinants of the premium that you pay for health insurance per month:
- Age is another factor where the older the driver, the higher premium one has to pay. It has been noted that the existing health care plans cost about two to three times more to citizens within the ages of 50 and 60 than it does to younger people.
- Antecedents – The cost of health insurance depends on the state. Certain states are costlier in terms of medical expenses which are brought out by high premium costs.
- Coverage Level: There are Bronze, Silver, Gold and Platinum plan for coverage of the interested items. The more coverage, the higher the monthly premium.
- Income & Subsidies – It is worthy of note that the government has placed measures like subsidies to reduce your premium rate if your income is low.
- Employer Sponsored Insurance – If you employer offer health insurance then there are big chances that you will find yourself in better position as compared to the person who buys private insurance.
2.4 How to Estimate Your Monthly Health Insurance Cost
Not sure how much you’ll pay? As mentioned, here are some quick techniques that can help you approximate your monthly health insurance premium:
- Ensure that you have looked at the average costs based on your age and the state you live in.
- This website will have the information and you will be able to know if you are eligible for a subsidy or not as in the case of healthcare.gov.
- It is wise to compare between HMO, PPO and HDHP plans and determine, which one is the most cost efficient in your case.
- He must also consider out of pocket expenses and not only he monthly rates that one needs to pay for the policies.
The following factors affect most health insurance costs according to the Health Insurance Portability Account Act: (And How to Choose the Right Plan)
3. Various elements that can influence the amount of health insurance one is required to pay each month.
Many people are also each stuck on the presumptions of health insurance that they are mutual same attractive same city, same price fixed at an equal monthly payment. But that was far from the truth.
Actually, there are many what determines the amount of money that one has to part with monthly in as much as health insurance is concerned including age, type of the plan among others. Read on and get to find out the things making your health insurance cost higher than others if you have ever been intrigued to know.
1. Age: The Older, The Dearer: The objective of the research is to assess how much people pay according to their age.
This implies that one’s age is an important factor in attracting health insurance premium. Those in the lower age group attract lower charges and higher amount are charges from those over fifty years of age.
For instance, a young adult aged 25 years might pay $250 for a certain plan while a senior citizen aged 60 years and above may pay more than $800 for the same product.
2. Location: Place of Residence Determines the Premium Cost
It is very important to keep in mind that the premium of the health insurance both in terms of absolute and relative difference significantly differ across states. There is an argument that some states have higher competition from the insurance companies thereby reducing the cost. Some have higher expenses i.e. in this aspect; thus making premiums costly.
For instance, the cost of basic health cover per month may be $ 500 in California and $ 400 in Texas for the same plan.
3. Which of the following exists – PPO, HMO, EPO or HDHP?
It has to be made perfectly understood that not all health plans are created equal. Premium rate is an important aspect of health insurance policy and this means that the type of the plan determines the rate at which you are charged on monthly basis.
Here’s a quick breakdown:
- HMO (Health Maintenance Organization) – This is cheaper but it requires that one to have doctor from the list provided by the insurance company.
- PPO (Preferred Provider Organization) – more expensive, but the holder of this policy is free to choose any doctor she or he would like.
- EPO (Exclusive Provider Organization) – it costs somewhat more, but the patient has to go to a network.
- HDHP (High Deductible Health Plan) – Lower premiums but higher out-of-pocket costs.
HDHP with an HSA is ideal for health-conscious individuals who never or rarely get sick hence you will not be spending a lot of money on medical bills.
4. Coverage Level: Bronze, Silver, Gold, or Platinum?
All the available health insurance plans are categorized into four categories.
Plan Type Monthly Premium Out-of-Pocket Costs
Bronze Low High
Silver Moderate Moderate
Gold High Low
Platinum Very High Very Low
Bronze and silver plan will be good options for you if you are looking to have small amounts on a regular monthly basis. They also may offer Gold or platinum if your family has high use of medical services, then they will pay for themselves.
How to Lower Your Monthly Health Insurance Costs & Choose the Right Plan
5. How to Lower Your Monthly Health Insurance Costs
Many a time people think that their health insurance has to be costly and there is no way they can reduce on the cost. But that’s not true. Below are some ways which can be used to help one minimize his or her monthly premiums but still get good coverage’s.
In the event you are involved in the question ‘How to have cheaper health insurance?’ there are several concrete steps to take.
1. Part of maintaining a healthy lifestyle is actively contributing to making wise decisions when it comes to a persons’ health plan choice, therefore, when selecting the health plan a person has to make a conscious decision to choose a High-Deductible Health Plan (HDHP).
The first method to reduce the monthly health insurance cost is to choose a high-deductible health plan (HDHP).
Why does this save money?
- Of the many benefits, this plan comes with relatively lower charges per month as compared to other stamp plans.
- There is the health saving account which is used to save for health expenses and you can pay for these expenses without worrying about tax.
- Suitable for people, who do not have any health issues and rarely attend doctors’ appointments.
Example: The Bronze HDHP = $300 monthly, and the Gold PPO would be $700 or more per month.
2. It is therefore important that the populace take advantage of Government Subsidies or ACA Marketplace Plans.
Individuals, families and those who purchase health insurance through the Health Insurance Marketplace can be awarded premium tax credits (subsidies) that reduce their premiums.
Who qualifies for subsidies?
- If your income is situating between hundred percent to four hundred percent of the federal poverty level.
- Some of the aforementioned states have provided a widened cap or projected aids for the classified higher-income earners.
For instance, an employee with an average income of $ 35,000 annually would pay $ 100 for the month instead of $ 500 when subsidies have been put in place.
3. Health insurance enrollment was gained through a professional group association contribution.
For those who are not covered through their employers or are unemployed, one can search into whether associations, societies, clubs, freelance structures, or any other corporate bodies provide group health insurance.
Where to look?
• Freelancers Union
• AARP (for seniors)
• Chamber of Commerce groups
Why does this help? This makes it cheaper to be in a group to pay for the insurance as opposed to the individual paying for insurance behind the group.
4. If you happen not to meet the criteria needed to be eligible for the above mentioned health insurance programs you may consider enrolling in either Medicaid or CHIP.
A large population remains unaware of the fact that they can be eligible for Medicaid or the Children’s Health Insurance Program (CHIP) that provide healthcare insurance at an affordable or even no cost.
Who qualifies?
• Eligible applicants have low income (depend on state).
• Families with the young children should try to apply for CHIP.
How much does it cost? Most Medicaid plans are offered for $0 monthly or highly affordable; thus, it could be mistaken for being free.
5. How to Choose the Best Health Insurance Plan for Your Budget
Having given an insight into how one can reduce the health insurance costs, let us proceed with how to select the right one without necessarily going broke.
One wrong approach is to consider that the lowest price indicates the best offer. However, analyzing the nature of the two, it together with the wrong type of plan is costly once one has to pay more out of their pocket.
Here is how you can decide what type of web site is suitable for your pocket and your business requirements.
1. Understand Your Healthcare Needs
Because there are different types of nursing home plans, before selecting a particular plan, you should always consider the following question:
- How often do you have check-up visits to physician?
- Would I like to confirm whether I have a current health condition that requires the consumption of prescription drugs?
These questions were: Are there any long standing medical conditions?
- Have I consulted any specialist service (dermatology, mental health, etc.)?
- For the individual who does not frequent the doctor → perhaps a high-deductible plan (HDHP) will be beneficial for you.
- If you frequently require health care services → A PPO or a Gold plan might be more suitable for you.
2. Compare Monthly Premiums vs. Deductibles
One of the most prevalent health insurance errors is paying too much attention to the monthly payments in regard to the insurance policy without paying attention to the deductibles and the other monetary costs when receiving medical services.
- Low Premium = High Deductible (Good for healthy people)
- High Premium = Low Deductible (Good for people with frequent medical needs)
Example:
- A plan with 200 dollars monthly cost could have a 7,000 dollars deductible.
- Here it is widely possible to have a premium of $500 each month and a deductible of $1,500.
- If you often need to visit your doctor, it is possible that the second variant is the most beneficial for you.
3. Check the Insurance Network
All plans include different types of medical centers and healthcare workers in their benefits packages. Finding a plan that matches your needs becomes easier by considering two main evaluation points including how doctors work with specific healthcare programs.
Common types of networks:
- HMO: Lower cost, but limited doctor choices.
- PPO: Costs about twice as much; however, a person can get treated by any doctor of his/her choice.
- EPO: In-between HMO & PPO, patients are required to choose the health plans that are in the network and there is no need for a referral.
Significance: It’s preferable if you frequently visit a specialist; although they may cost more per month, they are PPOs..
Common Health Insurance Mistakes & How to Avoid Them
Some of the things you are likely to have seen or heard by checking other plans are; Common mistakes people make when selecting their health insurance plans.
Many people have a notion that once they are subscribed to an insurance service, they are shielded from all possible medical costs. But that’s not true. Meanwhile, selecting a wrong plan increases the chance of having to pay for health facility service without insurance, high deductibles, and dissatisfaction.
Keeping these common errors in mind should assist you in avoiding them when choosing a health insurance plan.
1. This part of the work is dedicated to the analysis of the fact that people often tend to select the cheapest plan without actually considering things that lie under the coverage aspect.
This is because most people look at the monthly premium and in so doing, concludes that the lowest, is the best. However, if the amount of deductible is unreasonable, or if the coverage is poor, the payments for medical expenses will be way higher.
What to do instead?
- Some of the points that need attention include deductible, co-payments and out of pocket expenses.
- Ensure fundamental and cost-effective services for example, attending a physician, getting prescription and hospital admission.
- If you frequently visit the doctor, it may be wiser to opt for a higher premium plan with less per visit cost.
Example:
- A plan on A: $200 per month, $7,500 per person permissible: High overall costs.
- Plan B is $350 per month with $1,500 coinsurance, better for people who encounter many medical expenses.
2. Ignoring the Insurance Network
There is a misconception that whoever has a health insurance may choose to attend whoever they want a doctor. If you opt for an incorrect plan, you might be forced to change your doctor of your preferred healthcare provider or else be charged out-of-pocket costs.
How to avoid this?
- Ensure that the hospitals and the doctors of your choice are in the plan.
- For those who go on the road much, ensure that the plan comes with nationwide benefits; some of the policies are restricted to state lines.
- If you prefer to have more freedom in selecting your physician, opting for PPOs would be advisable.
PPOs tend to be more expensive, but are more open-ended than HMO’s, which are cheaper but are limited by the number of providers contracted to offer services under them. PPOs are more expensive but they allow early access to more doctors.
3. Not Checking Prescription Drug Coverage
Can you take any prescription without considering where you will be accessing them? Some may exclude some prescriptions or have very high co-payments for brand-name medications.
What to do instead?
- Highlight the specific areas exposed and examine the plan’s drug formulary (a list of approved drugs).
- Check whether there is an over the counter equivalent medication for the prescribed drugs.
- Let there be a health plan with a prescription.
Example: A plan might cover drugs valued at $10 but have a price of more than $100 for branded drugs.
4. Underestimating Total Out-of-Pocket Costs
Some people only consider the amount of money charged on monthly basis but fail to consider deductibles, co-pays, and coinsurance. Sometimes you may be shocked to find that for a few dollars per month, you are only covered for thousands of dollars.
How to avoid this?
- It’s important that you look at the co-insurance (your share of the costs for covered services in a calendar year) and the out of pocket maximum, (the total amount of money you will have to pay for any services in a given year).
- Check the co-payments and coinsurance for the visits to doctors and the stay in the hospitals.
- Would you travel a lot? Then it is better to select the plan with lower level of out-of-pocket expenses in case you have a number of medical sessions to attend.
Example: $20 per visit plan is preferred to the plan where a patient pays 40% for every visit.
5. Missing Open Enrollment or Special Enrollment Periods
That is why many people fail to register during the Open Enrollment Period and later turn to obtaining expensive short-term health insurance or facing the necessity to stay without health insurance.
How to avoid this?
- Keep the important information about Open Enrollment in your notes during the months between November and December.
- The Special Enrollment Period runs according to specific enrollment rules when you encounter qualifying situations.
- People with low incomes can receive Medicaid or CHIP assistance.
Gene discovery: Some states have an extended period of Open Enrollment as compared to the dates provided by the federal government. Every time you check the different regulations of the health insurance marketplace, make sure you refer to your state’s laws and rules.
Final Thoughts
There are effective strategies to reduce health insurance payments without compromising necessary healthcare protection.
- Want lower premiums? Protect your health needs through an HDHP or access subsidies.
- Need regular medical care? The Gold or PPO plan type is likely your best choice.
- Looking for the cheapest option? Examine Medicaid, Children’s Health Insurance Program, and employer health insurance programs.
- Analyzing various health plans side by side alongside their benefit information helps you pick one that offers good value for your money.