Average Cost Of Health Insurance Per Month – How much does health insurance cost? Across the United States, Americans pay a wide variety of monthly premiums for health insurance. Although these premiums are not determined by gender or pre-existing health conditions thanks to the Affordable Care Act, many other factors affect what you pay. We explore these factors below to help you understand how much you might pay for health insurance and why.
Many factors that affect how much you pay for health insurance are beyond your control. Either way, it’s good to understand what it is. Here are 10 key factors that affect how much you pay for health insurance.
Average Cost Of Health Insurance Per Month
Employer-provided coverage affects several of the biggest factors that determine how much coverage costs and how extensive it is. Let’s take a closer look.
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If you work for a large company, health insurance can cost as much as a new car, according to the Kaiser Family Foundation’s 2020 Employer Health Benefits Survey. Kaiser found the average annual premium for family insurance to be $21,342 in 2020, which was nearly identical to the base manufacturer’s 2022 Honda Civic MSRP of $22,715.
Employees contributed an average of $5,588 in annual costs, meaning employers picked up 73 percent of the premium bill. The average compensation for a worker in 2020 was $7,470. Of that, workers paid $1,243, or 17 percent.
Kaiser included health maintenance organizations (HMOs), PPOs, point-of-service plans (PPOs) and high-deductible health plans with savings options (HDHP/SO) when arriving at average premium numbers. It found that public postal services were the most common type of insurance, insuring 47 percent of covered workers. HDHP/SO covered 31 percent of insured workers.
Of course, what employers spend on employee health insurance leaves less money for wages. So workers are actually paying more for premiums than these numbers show. In fact, one reason wages may not have risen much over the past two decades is because health care costs have risen so much.
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At the same time, because workers are allowed to pay pre-tax health insurance premiums, their burden can be lower than for people who buy their own insurance through the federal health insurance marketplace or state health insurance exchanges. (In this article, “marketplace” and “exchange” are synonymous.)
The type of plan employees choose affects premiums, deductibles, choice of health care providers and hospitals, and whether they can have a health savings account (HSA), among many options.
In families where both spouses are offered employer health insurance, careful comparison is essential—one plan may be a much better deal than the other. A partner whose plan isn’t used can pocket a portion of the paycheck that isn’t withheld for health insurance. Or a couple without children might decide to choose their own company’s plan as individuals (coverage for couples rarely comes with any kind of discount—it’s basically just doubling the individual rates).
The federal marketplace for insurance policies on HealthCare.gov, also known as Obamacare, is alive and well in 2021, despite years of efforts by its political enemies to kill it. It offers designs from around 175 companies. About 12 states and the District of Columbia operate their own health exchanges, which basically mirror the federal site but focus on the plans available to residents. People who live in these areas sign up through their state instead of the federal exchange.
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Each available plan offers four levels of coverage, each with its own price. In order of price from highest to lowest, they are labeled as platinum, gold, silver and bronze. A comparator plan is the second least expensive silver plan available through the health insurance exchange in a given area and may even vary within your state of residence. It’s called a reference plan because it’s the plan the government uses, along with your income, to determine your likely premium subsidy.
The good news is that prices are coming down a bit. According to the Centers for Medicare & Medicaid Services (CMS), the average premium for the second-cheapest silver plan on HealthCare.gov dropped 4 percent from 2019 to 2020 for a 27-year-old. Six states averaged double digits for the second-cheapest silver payouts for 27-year-olds, including Delaware (20%), Nebraska (15%), North Dakota (15%) and Montana (14%). , Oklahoma (14%) and Utah (10%).
From 2020 to 2021, the average second-cheapest silver plan dropped 3 percent for a 27-year-old. Four states (Iowa, Maine, New Hampshire and Wyoming) saw average referral payments drop by 10 percent or more.
The American Rescue Plan Act of 2021 also established a special enrollment period (SEP) for purchase plans from February 15 to July 31, 2021. For new consumers who selected their plans through HealthCare.gov during this period, the average monthly premium was reduced by 27 %. From $117 to $85 thanks to extended subsidies. It also helped reduce out-of-pocket costs: deductibles dropped nearly 90% from $450 to $50.
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However, it is not generally good news. For more information, see CMS’ 2020 Health Insurance Exchange Premium Landscape fact sheet. It shows premiums for 27-year-olds who bought silver plans rose 10 percent or more in Indiana, Louisiana and New Jersey.
More importantly, percentage changes don’t tell us much about what people are actually paying: “Some of the states with the highest bills continue to have relatively high premiums, and vice versa,” the release said. “For example, while Nebraska’s benchmark plan premium decreased 15 percent from PY19 [plan year 2019] to PY20, the average 27-year benchmark plan premium for PY20 is $583. On the other hand, Indiana’s average PY20 benchmark plan premium is up 13% from PY19, the 27-year average PY20 benchmark payment is $314.”
In 2021, the same trend will continue. The 2021 CMS Brief notes that while Wyoming’s average benchmark plan premium decreased 10 percent from PY20 to PY21, the average premium for a 27-year PY21 benchmark plan is $648—the highest in the United States. How many 27-year-olds can afford such a monthly fee? By contrast, New Hampshire’s 27-year-old plan has the lowest benchmark premium in the nation at $273.
All of these numbers apply only to the 36 states whose residents buy plans through the federal exchange on HealthCare.gov. Residents of California, Colorado, Connecticut, Idaho, Maryland, Massachusetts, Minnesota, Nevada, New Jersey, New York, Pennsylvania, Rhode Island, Vermont, Washington and Washington DC buy insurance from their state exchanges.
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The good news is that many people who buy purchase plans pay lower premiums through what the government calls advanced premium tax credits, also known as subsidies. In 2019, 88% of people enrolled in HealthCare.gov were eligible for advanced tax credits.
What are these subsidies? They are credits that the government applies to your health insurance premiums each month to make them affordable. Basically, the government pays part of your premium directly to your health insurance company and you are responsible for the rest.
As part of the American Rescue Plan Act (ARPA) passed in March 2021, subsidies were increased for low-income Americans and expanded for high-income Americans. ARPA extended market subsidies above 400% of the poverty level and increased subsidies for those earning 100% and 400% of the poverty level.
You can withdraw the advance tax in one of three ways: equal amounts each month. more in some months and less in others, which is useful if the income is irregular. or as a credit against your tax liability when you file your annual tax return, which could mean you owe less tax or get a bigger refund. The tax credit is designed to make premiums reasonable based on household size and income.
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The credit is based on your estimated income for the year, so if your income or household size changes during the year, it’s a good idea to update your HealthCare.gov information right away so the payment credit can adjust accordingly. That way, you won’t have any nasty surprises at tax time and you won’t be paying higher premiums than you need throughout the year.
In addition to premiums, every health insurance beneficiary also pays a deductible. This means you pay 100% of your health expenses out of pocket until you pay a pre-determined amount. At that point, coverage kicks in and you pay a percentage of your bills and the insurance company picks up the rest. Most workers are covered by a blanket annual deductible, which means it covers most or all health care services. This is how the general discounts differed in 2020:
Individuals who qualify for cost-sharing rebates (a type of federal subsidy that helps lower health care costs, such as copayments and deductibles) are responsible for copayments of up to $115 for those whose household income is closest to the federal border. poverty level.
If you miss your annual enrollment period and don’t have one of the reasons that qualify you for asEP, you may need to purchase short-term health insurance that lasts from three months to 364 days. Since these plans typically cost an average of 54% less than exchange plans, you might as well decide, according to the Kaiser Family Foundation
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