What Is the Average Health Insurance Premium?
The Changing Cost of Health Care in the U.S.
In 2019, health care spending for Americans reached $3.8 trillion, or an average of $11,582 per person. These numbers are staggering. What are Americans getting for their money?
Learn more about the factors impacting the cost of health care in the U.S. and the changes over recent years.
Health Care Costs Based on Age and State
Health care costs vary based on your age and the state you live in. As you might expect, younger, healthier adults pay the least for health care coverage. However, even for younger adults, the cost of coverage varies greatly based on geographic location.
In 2021, the average cost of a monthly health insurance premium in the U.S. is $495 per month, with an average annual deductible of $5,940. In some places, the cost varies greatly from the national average. In West Virginia, the average premium is $712 with a deductible of $8,540; in neighboring Maryland, the average premium is only $344 with a $4,122 deductible.
Age is another important factor when it comes to determining the costs of health insurance policies. Consider this breakdown by age for the average monthly health care premium without subsidies:
- 18 and under: $236
- 18-24 years: $278
- 25-34 years: $329
- 35-44 years: $411
- 45-54 years: $551
- 55-64 years: $784
The Costs of Individual vs. Family Plans
The Affordable Care Act offers some subsidies to make health insurance more affordable for Americans. However, not everyone qualifies.
In 2020, health insurance premiums for unsubsidized individual customers were $456 per month on average, while family premiums averaged $1,152 per month. Additionally, the average individual deductible was $4,364, and the family deductible averaged $8,439.
Over the course of a year, average health insurance spending for a family of four in the U.S. was $25,011 in 2020. This figure includes spending on monthly premiums as well as meeting the deductible.
How Premiums Costs Have Changed in Recent Years
In recent years, health care costs, as well as monthly and annual insurance premiums, have continued to rise for both individuals and families in America. The average yearly health insurance premium for a family has increased by 22% since 2015 and 55% since 2010.
And while health care spending in the U.S. grows each year, projections estimate yearly annual spending of nearly $6 trillion by 2027, compared to $3.8 trillion in 2019.
Understanding Tiered Coverage
In an effort to allow customers to choose a plan that fits both their medical needs as well as their budget, health care providers offer tiered coverage.
A basic benefits package will have higher deductibles and co-pays, but it will go for a much cheaper monthly premium. On the other hand, the higher-tiered plans with low deductibles and little or no out-of-pocket expenses may be out of reach for the majority of Americans.
However, even basic health care coverage with higher deductibles and co-pays is better than the alternative—no health care coverage at all.
Here are the statistics for average individual monthly health insurance premiums based on tiered-plan choice:
- Catastrophic: $195. Catastrophic insurance covers essential health care benefits only.
- Bronze: $448. A bronze plan has low monthly payments for basic health care benefits and a higher deductible.
- Silver: $483. Silver plans offer more coverage at a higher monthly premium but with a lower deductible.
- Gold: $291. A gold plan offers comprehensive health care coverage with higher monthly premiums and low out-of-pocket expenses.
- Platinum: $363. The platinum plan offers the most comprehensive health care benefits package with the highest monthly premium of all plans. However, you pay little to no out-of-pocket expenses.
Tips for Finding Health Care Coverage
With the increasing costs of health care, how can Americans save on health care and the cost of insurance? Consumers must be diligent and do their research to compare plans and get the most comprehensive health coverage they can afford.
If your employer offers health insurance and pays for a large portion of the premium, it is a great option to consider. If not, shop the health insurance exchange for affordable coverage and check to see if you qualify for any subsidies to help offset the cost of health insurance. Health savings accounts can also help you pay for out-of-pocket expenses such as co-pays and deductibles.
Finally, if you have a catastrophic accident or illness, ask the hospital for help with a payment plan. Many hospitals will reduce their charges for those who are unable to obtain insurance.