Main menu


How much does health insurance cost in the United States of America?

How much does health insurance cost? Citizens of the United States of America pay all premiums for health insurance purposes, but these monthly or annual payments vary greatly, as the value of these premiums is not determined by health or gender, thanks to the Affordable Care Act, with some exceptions, but is determined according to several factors. We will cover it below.

fast facts:

  • Several factors help determine the value of health insurance premiums, including state laws, federal laws that regulate costs, location of residence, whether or not the job provides insurance, and the type of insurance plan chosen.
  • The annual value of insurance coverage for a family of four is $ 20,576, and business owners bear 71% of this cost (year 2019).
  • Perhaps the rising cost of health insurance explains the drop in wages over the past two decades.
  • The highest premium for a standard insurance plan (for a 27-year-old) is $ 723 in Wyoming, while the lowest value is $ 282 in New Mexico.
  • Deductions may vary depending on the size of the company the insured works for or the type of insurance plan.

Factors that affect the value of the insurance premium:

Many factors influence the amount of your health insurance payments and are not controlled, so it would be a good idea to understand what these factors are. These factors are:

  1. State and federal laws, which specify what the insurance should cover and how much the insurance will pay.
  2. Will the insured obtain insurance through her work or personally?
  3. Is the insured's salary high or low? Low-wage workers tend to pay more through employers, but may pay less exchange due to subsidies.
  4. The volume of work for which the insured works. Insurance is usually cheaper for larger companies.
  5. The state in which the insured lives.
  6. Does the insured live in rural or urban areas? Premiums tend to be lower in urban areas.
  7. The county in which the insured lives. Some provinces have a single insurance plan and competition is greater in others, which means lower prices.
  8. Type of insurance plan. Both preferred service organizations and Platinum plans offered by the federal health insurance market tend to be more expensive.
  9. Years. Older people pay 3 times more than younger people.
  10. Smoking, as smokers pay 50% higher premiums.

The coverage provided by the operators contributes most of the factors that determine the cost of insurance coverage and its coverage.

Employee Health Insurance Premiums:

If you work for a major company, the cost of your health insurance can equal the price of a new car. According to Caesar Family Foundation (KFF) research on health benefits for employers, it was found that:

  • The average annual premium for health coverage for a family of four equals $ 20,576, which is roughly the same as the price of a 2019 Honda Civic.
  • On average, families bear about $ 6,015 of that cost, which means that business owners bear 71% of the premiums.
  • Business owners pay premiums of $ 7,188 per employee, while the employee pays $ 1,242, which is equivalent to 18% of the value of insurance premiums.

The average cost of an insurance plan includes all the types of insurance plans available, such as:

  • Plans of health maintenance organizations.
  • Service point plans.
  • High deductible health plans with savings options.

The preferred service provider insurance plan is the most popular, offering 44% of the insurance coverage provided to workers, followed by high-deductible health plans with savings options, such as a savings account. savings for health, and it provides 30% of the insurance coverage for employees.

Of course, what business owners spend on health insurance for their employees affects what they earn in wages, so employees bear the burden of paying insurance premiums to a greater extent than the figures show. In fact, the rising cost of health insurance is one of the reasons that wages have not increased significantly over the past two decades.

At the same time, employees must pay their income insurance premiums before taxes are calculated, but their insurance burden may be less than that of those who obtain their insurance in the federal health insurance markets or exchanges of insurance. state health insurance.

The type of insurance plan employees choose affects the amount of insurance premiums, deductions owed, the choice of hospitals, the type of health service provided, and their access to health savings accounts.

As for families, when spouses receive an insurance offer from both sides of their job, they may find that one of the two offers is better for the whole family, so it is necessary to compare the two offers well, and the partner Who will not use your insurance offer can decline this offer and benefit from its value, but if the spouses do not have children, they can choose between their own individual insurance plans.

Individual health insurance premiums on insurance exchanges:

At the time of this writing, the government health care website did not announce premiums for insurance plans on insurance exchanges, however, the US Department of Health announced low premiums on October 22 and an increase in the number of insurance plans available by 2020.

This year, insurance exchanges will offer insurance plans through 175 service providers instead of 132 two years ago, but it is still less than the number of service providers in 2016, when it reached 237, and the media sector The ministry announced changes in the premiums of those registered from the age of 27 in what is known as the reference plan, in the context of the current administration's speech on improving market conditions.

The referral plan is the second lowest cost silver insurance plan, available through the Health Insurance Exchange in a certain region, and differs from state to state, and is called the referral plan since the government uses it, along with with income, to determine the amount of support owed on insurance premiums.

The announcement from the Ministry of Health specified a 4% reduction in the average premium for the second lowest cost of the Silver Plan from 2019 to 2020 on the government's healthcare website.

Six states experienced a double-digit decline in the average cost of premiums, including states: Delaware 20%, Nebraska 15%, North Dakota 15%, Montana 14%, Oklahoma 14% and Utah 10%.

But that doesn't explain the 2020 premium change for people in their 50s who buy Bronze Plans.

Deep search for pricing information:

The 2020 Health Insurance Premium Swap Report revealed that the premium cost of silver insurance plans for people age 27 and older has increased by more than 10% in Montana, Louisiana, and New Jersey.

More importantly, the changes tracked by the report do not clarify the size of actual payments made by individuals, as some states with the largest declines still pay relatively high premiums, and vice versa.

For example, the referral plan premium for the state of Nebraska decreased by 15% in 2020 compared to 2019, to $ 583 for 27-year-olds. While the average referral plan premium for the same category in Indiana increased by 13%, between 2019 and 2020, to just $ 314.

The average 27-year-old referral plan premium in Wyoming jumped to $ 723 (which begs the question: How many 27-year-olds can afford a monthly premium of this size?). In contrast, the New Mexico Reference Plan premium reached $ 282, which is the lowest value. For state insurance premiums.

These figures reflect the case of 38 US states, whose residents obtain their insurance through the Federal Stock Exchange, through the government health care website, while residents of California, Colorado, Connecticut, Maryland, Idaho, Massachusetts, Minnesota, Rhode Island, Vermont, Nevada, New York, Washington, and Washington, DC, get their insurance through the state's insurance exchange.

Importance of subsidies (grants):

People who obtain insurance in the insurance market pay lower premiums through the Premium Premium Tax Credit Program, or so-called benefits. 88% of people registered on the government healthcare website got this credit in 2019.

These benefits are a credit that the government grants monthly on the health insurance premiums to facilitate these premiums to the people. The government pays a portion of the premium value directly to insurance companies, while individuals pay the remainder of the premium.

Individuals obtain the tax credit provided for installments in one of three ways, either in the form of equal amounts per month, or variable amounts per month (which accommodates people with irregular income), or in the form of a credit To cover income tax, by filing the annual tax file, which means Pay less taxes or get bigger exemptions. The tax credit is designed to make insurance payments easier, depending on the number of family members and income level.

Credit size is determined based on expected income throughout the year, so if income or the number of family members changes during the year, it is best to update this information on the healthcare website of the government, so that the premium credit is adjusted according to those updates, this way the insurance holder will not face any surprises other than Sarah is at the time of paying the tax and no premiums will be charged per year.

Deductions (deductions) for health insurance:

In addition to the insurance premiums, the insured bears all his health expenses up to the default value of the insurance, where the insurance coverage is activated, so the insured assumes part of the cost of the health service, while the insurance company insurance bears the rest of the cost.

Most workers are covered by general annual deductions and this applies to most health care services. The variation in general discounts in 2019 is tracked below:

  •  Average general deductions per year for a single employee or employer: $ 1,655.
  • Average general deductions per year for an employee who works for a small business: $ 2,271.
  • Average general deductions per year for an employee who works for a major company: $ 1,412.

People who qualify for participatory cost reduction (a type of federal subsidy that reduces the cost of health care expenses, such as deductibles and copayments) incur lower discounts, up to $ 115 for people with incomes close to the income line. federal poverty.

A note on short-term plans:

In the event that the registration period on the government health care website ends, with no qualifying reasons for the special registration period, individuals must obtain a short-term health insurance plan that provides coverage for a period ranging from three months to a year. This type of plan costs less than plans. The availability in the insurance market is approximately 54%, so the insured person can choose one of the short-term plans if they cannot afford the insurance cost through their work or the insurance market, and it is possible you are not eligible for benefits.

Although the legislation differs from state to state in general, it can be expected that there are previously specific cases that are not covered by insurance plans, in addition to that certain health conditions are not acceptable for their owners to be registered in the plans. for sure. Other common exceptions are maternity care, mental health care, and prescriptions, due to which there are financial limits to coverage.

Short-term insurance plans do not offer the same protection as stock exchange plans, so they may not be useful enough or may not be useful if maximum coverage is needed.

Minimum limits:

The amount a person pays for health insurance is not speculative, as it is subject to many factors, few of which are under the control of the insured.

If someone buys insurance on a government health care website, they can use government means to anticipate the benefits they may receive, and if they buy the insurance through their employer, they can review the registration information, giving them Allow time to review your options.

Attending sessions that provide information on insurance and using any employer comparison method will help you choose the best plans a person can afford.