In this article, you will learn
- What is individual health insurance, and how does it work?
- What is the cost of individual health insurance?
In 2020, the average monthly cost of health insurance in the United States will be $456 for an individual and $1,152 for a family. Prices vary, however, due to the extensive range of health insurance available. Understanding how health coverage and cost are related will help you choose the best health insurance for you.
Browse health insurance by state to get personalized rates for coverage options in your area.
What is individual health insurance, and how does it work?
Many people get health insurance through a group plan offered by their employer or union, but others must buy it independently. You get an individual plan when you get health insurance, even including family members.
Individuals can purchase individual health insurance through a government exchange or marketplace (commonly referred to as ACA plans) or through private insurers due to the Affordable Care Act (ACA). You may only be able to buy health insurance through a government exchange at certain times of the year. In most circumstances, you can purchase health insurance at any time from a private insurance company.
Examining ACA coverage might help you better understand your health insurance options. Metals are used to categorize healthcare plans under the Affordable Care Act. Here is where you may learn more about the metal plans: Bronze, Silver, Gold, and Platinum are the four different types of metals.
Hospitalizations, outpatient and preventative care, maternity and child services, lab tests, rehabilitation services, mental health therapy, and prescription pharmaceuticals must be covered under the Affordable Care Act. Each insurer has complete control over the delivery of these and maybe other benefits. The metallic levels help buyers determine how much of their healthcare costs the plan will cover on average and how much they will have to pay out of pocket.
What is the cost of individual health insurance?
Individual health insurance premiums vary. Personal coverage preferences, age, income, geography, the number of family members (if any) covered, and healthcare utilization all influence the cost of health insurance.
You can receive a reliable estimate of your costs when you know your health plan’s premiums, deductibles, cost-sharing expenditures, and maximum out-of-pocket limits. You can also compare health insurance plans using this information. At eHealth, licensed insurance brokers provide extensive knowledge about available health plans. They can assist you in reaching choices to get the most cost-effective health plan that suits your requirements.
The insurer costs you a monthly payment in exchange for providing healthcare coverage.
According to a recent eHealth survey of ACA plans, the national average health insurance premium for an individual in 2020 will be $456 and $1,152 for a family. People who get government subsidies are not included in this average cost.
Expenses for deductibles and cost-sharing
A deductible is an amount you pay for healthcare services each year before your insurance kicks in and pays its share of the bill. According to our research, the average annual deductible for single, individual coverage in 2020 will be $4,364 for single coverage and $8,439 for family coverage. Remember that individual health insurance plans include a wide range of deductibles, some as low as $0.
Copayments & coinsurance are cost-sharing payments you make after you’ve met your annual deductible for medical services.
A copayment is a set amount you must pay for covered medical treatments. Assume your plan requires a $30 copay and your doctor’s appointment costs $150. If you want to:
- If you haven’t met your deductible, you will be charged $150 at the time of your appointment.
- Once your deductible has been satisfied, you’ll pay your $30 copayment.
After you’ve reached your deductible, you’ll pay coinsurance, which is a proportion of the cost of covered healthcare services. Assume your insurance plan has a 20% coinsurance rate, and your doctor’s appointment costs $150. If you want to:
- If your deductible hasn’t been met, you’ll be charged $150 for the appointment.
- Once you’ve met your deductible, you’ll pay 20% of $150 (or $30).
Limits on out of pocket costs
The maximum out-of-pocket limit provides a financial safety net. This is the maximum you can spend in a calendar year on covered services. Once you reach this threshold, the insurance company will cover all covered services for the remainder of the benefit year. The annual maximum out-of-pocket limit is calculated using your deductible, copayments, and coinsurance payments.
According to Healthcare.gov, the out-of-pocket limit for an ACA plan for the 2020 plan year cannot exceed $8,150 for an individual and $16,300 for a family. Many insurance plans have reduced out-of-pocket maximums.
What are the effects of premiums, deductibles, cost-sharing, and out-of-pocket limits on healthcare costs?
In general, the more benefits your plan provides, the higher your premium will be. However, your medical costs for treatment are cheaper.
Consider the Affordable Care Act (ACA) plans to see how these expenses influence your plan selection.
- The Bronze plan has the lowest rates among the ACA metals plan categories. According to our research, the national average premium for single coverage in 2020 will be $448 per month and $1,041 per month for family coverage. If your primary goal is to protect yourself financially against the high costs of a significant illness or injury while paying a low premium, a Bronze plan may be perfect for you. However, you will be responsible for most of your routine medical treatment. Whether or not the deductible is reached, the plan covers preventative care (such as an annual wellness visit, screenings, and counseling).
- If you can afford a little more premium than a Bronze plan to receive more insurance payment for medical care, a Silver plan may be a viable choice for you. In 2020, the national average Silver plan monthly premium for single coverage will be $483. The average monthly cost of family coverage is $1,212.
- A Gold plan may be perfect for you if you’re prepared to pay higher monthly premiums to have more of your medical expenses covered by insurance than you would with a Bronze or Silver plan. If you or your family requires frequent or extensive medical treatment, a Gold plan may be highly beneficial. For single coverage in 2020, the national average Gold plan premium is $569. The average monthly price for family coverage is $1,437.
- The Platinum plan may be an excellent choice if you can afford to pay a higher monthly premium in exchange for minor medical expenses associated with thorough, continuous health care. In 2020, the Platinum plan cost for single coverage will be $732 per month and $1,610 per month for family coverage.
Some persons can acquire a plan with catastrophic coverage and the metallic plan categories. Catastrophic insurance plans offer low premiums but large yearly deductibles ($8,150 in 2020). On the other hand, preventive care is covered regardless of the deductible. These plans may be a good insurance option for young, healthy people. You must be under 30 years old or have a hardship or affordability exemption to be eligible for a Catastrophic plan (based on job-based or exchange insurance being unaffordable). Learn more about Catastrophic Insurance.
How can you pick a plan that is both reasonable and satisfies your requirements?
More than 75% of eHealth consumers who purchased ACA individual health insurance chose Bronze or Silver plans. Your state may have its exchange for comparing and purchasing ACA insurance, or it may use Healthcare.gov, which the federal government runs. Keep in mind that the exchange isn’t the only option.
Our registered insurance brokers can assist you in finding the best health plan to fit your needs and budget. They’ll listen to your healthcare priorities and utilize their knowledge to match your needs to healthcare options both on and off the exchange.
Is it possible for me to save money on my health insurance?
You have no say in whether or not you become ill or injured, but you do have some say in how much you pay. While an eHealth broker can assist you in identifying potential cost controls for your specific scenario, there are some things you can do on your own to reduce your health insurance expenses.
- Check to see whether you qualify for government assistance. If you buy your health insurance, a government aid program may be able to help you pay for it. The Advanced Premium Tax Credit subsidy reduces your monthly premium payment. The Cost-Sharing Reductions program can help you deliver a lesser cost-share for medical services. Both of these programs are aimed at assisting low-income individuals. To see if you are qualified for lower expenses, utilize this Healthcare.gov tool.
- Check to see whether you are qualified for Medicaid. Every state has a Medicaid program and a Children’s Health Insurance Plan (CHIP) to provide low-income individuals and families with healthcare,
- To get more knowledge about these programs and see if you are eligible, contact your state’s Department of Insurance or Health Department.
- Check to see if you are qualified for Medicare. If you are 65 or older and handicapped, you may be eligible for Medicare, even if you are still working. For 2020, the regular monthly Medicare Part B (medical insurance) premium is $144.60. A Part A (hospital insurance) premium is not required for most persons who have worked for at least ten years and paid Medicare taxes.
- Select a plan with a high deductible and a health savings account (HSA). This insurance plan type may save you money if you aren’t qualified for government assistance programs. High-deductible plans have cheap premiums, and many of them provide some preventive care. HSAs are health-savings accounts that you can use to pay for medical bills that your insurance doesn’t cover. A health savings account saves you money on taxes since the money you put in and take out is either tax-free or tax-deductible.
- Purchase a medical supplement plan as well as a high-deductible health plan. You may be able to save money by choosing a high-deductible plan with supplemental insurance to assist pay for your expenditures if you become very ill or injured. Additional insurance protects you against specific health issues like accidents, critical care, disability, and death. Premiums for these plans often range from $25 to $50 per month, and there are usually no deductibles.