What is the average health insurance premium?

The cost of healthcare in the United States has changed significantly. In 2020, annual healthcare spending in the U.S. increased by 9.7%, reaching a record high of $4.1 trillion, or $12,530 per person. As a percentage of the nation’s gross domestic product (GDP), healthcare spending accounted for 19.7%. These figures are staggering. What do Americans get for their money?

Healthcare Based on Age and State

Healthcare costs vary based on age and the state in which you live. Unsurprisingly, younger and healthier adults pay less for healthcare coverage, but even for younger adults, the cost of coverage can vary widely based on location.

In 2021, the average monthly health insurance premium in the U.S. was $541 per month. The average annual deductible was $5,940. In some places, costs can differ significantly from the national average. In West Virginia, the average is $831 with a minimum deductible of $8,540; in neighboring Maryland, the average is only $344 with a minimum deductible of $4,122.

Individual vs. Family Plan Costs

The Affordable Care Act provides some financial support to make health insurance more affordable, but not everyone qualifies.

In 2021, the average cost of health insurance premiums for uninsured individuals was $645 per month, while family costs averaged $1,852 per month. The individual minimum deductible is $4,490, and the family minimum deductible is $8,620.

Over the year, the average healthcare expenses for a family of four in the U.S. amounted to $22,221 in 2021. This figure includes expenses for monthly premiums. It also includes meeting the minimum deductible.

How Premium Costs Have Changed in Recent Years

In recent years, healthcare costs for individuals and families in the United States have risen. This is true for both monthly and annual insurance premiums. The average annual premium for families has increased by more than 25% since 2015 and has risen by more than 60% since 2010.

Healthcare spending in the U.S. grows every year. Projections estimate that annual spending will reach nearly $6 trillion by 2027, which is a 50% increase compared to the $4.1 trillion spent in 2020.

Understanding Tiered Coverage

Some healthcare providers offer tiered coverage in an attempt to allow clients to choose a plan that fits their medical needs and budget.

A basic benefits package will have higher deductibles and copayments but will be significantly cheaper in terms of monthly premiums. On the other hand, high-tier plans with lower deductions and little to no out-of-pocket expenses may not be available to many people. Even basic health coverage with higher deductibles and copayments is better than the alternative – having no health coverage at all.

Here are some statistics for the average monthly premiums for individual health insurance paid in 2020 based on tiered plan selection:

• Catastrophic: $195. This insurance only covers basic health benefits.
• Bronze: $448. The bronze plan has low monthly payments for basic health benefits. You will have a higher maximum deductible.
• Silver: $483. The silver plan provides more coverage with a higher monthly premium but with a lower minimum deductible.
• Gold: $291. The gold plan provides comprehensive health coverage with higher monthly premiums and low out-of-pocket expenses.
• Platinum:
  $363. The platinum plan offers a comprehensive healthcare benefits package with the highest monthly premium of all plans. You will pay few or no out-of-pocket expenses.

Tips for Finding Health Coverage

As healthcare costs rise, how can Americans afford healthcare and insurance premiums? Be cautious and do your research to compare plans. This way, you can get the most comprehensive health coverage you can afford.

If your employer offers health insurance and pays a large portion of the premium, that’s a great option to consider. If not, shop around in the health insurance marketplace for affordable coverage. Check to see if you qualify for any financial assistance to help offset the cost of health insurance. Health savings accounts can also help pay for out-of-pocket expenses such as copayments and deductibles.

Finally, if you experience a catastrophic accident or illness, seek help from the hospital through a payment plan. Many hospitals may reduce their costs for those who cannot get health insurance.

Frequently Asked Questions (FAQs)

What is a health insurance premium?

A health insurance premium is the amount you pay monthly for coverage. This payment keeps your coverage active.

What are other costs of health insurance besides the premium?

In addition to the premium, you may have to pay costs such as deductibles, copayments, or coinsurance. These are costs you share with the health insurance company. Some preventive care, such as check-ups and vaccinations or annual visits with your doctor, may be provided at no additional cost to you.

What are premium tax credits for health insurance?

A premium tax credit is a federal tax credit that can help lower the cost of insurance you buy through the health insurance marketplace. This is a refundable credit, so if it’s larger than the tax amount you owe, you’ll receive the difference as a credit toward your taxes or a refund from the IRS.

Source: https://www.thebalancemoney.com/what-is-the-average-health-insurance-premium-4586358