Health Insurance Cost: Average Rates & What Drives Them

Health insurance has no single price. A person who gets coverage through an employer pays a payroll share that looks nothing like the premium a self-employed buyer sees on the ACA marketplace, and both differ from what an insurer actually charges for the plan. When people ask what health insurance costs per month, the answer depends on which of those three numbers they mean.

This guide separates them. It covers marketplace premiums by age, plan type, and family size, then employer plans, where the worker pays only part of the total. Premiums are only one piece of the bill, since deductibles, copays, and the out of pocket maximum decide what you pay when you use care.

Age is the largest rating factor on the individual market. Insurers charge older adults more than young adults, which is why the national averages climb at each step. The figures above are monthly premiums before any tax credit.

A premium tax credit can lower what you actually pay if your household income falls in the eligible range. Because the credit depends on income and household size, the average premium is a poor guide to your own cost. HealthCare.gov or your state exchange shows the net price after subsidies for your situation.

The network type also moves the price. HMO plans limit you to a defined network and tend to cost less. PPO plans let you see out of network providers at a higher cost and usually carry higher premiums.

The gap between plan types varies by state, so a national average only shows the general direction. In some states a PPO is priced close to an HMO, and in others it costs far more.

Adding dependents raises the premium, though not in a straight line. Children are priced below adults.

For a family, the monthly premium is easier to understand when you compare it with the deductible and out of pocket limit, since a family plan reaches those thresholds faster than an individual plan does.

Most people with job based coverage never see the full premium. The employer pays a large share, and the worker pays the rest through payroll deductions.

The worker contribution is the number that matters for a household budget. The total premium shows how much the plan costs to run, and the difference is what the employer covers. If you leave the job, the full premium is what continuation coverage such as COBRA is based on.

Where you live changes the price a great deal. State rules, the number of insurers competing, and local hospital prices all feed into premiums. The benchmark silver plan, which is the reference for premium tax credits, shows the spread.

Two states are shown here as examples of the high and low ends. Your county can differ from your state average, so enter your ZIP code on the marketplace to see real prices.

Published averages disagree because they measure different things. One source may report the second lowest cost silver plan for a 40 year old, which is the benchmark used for subsidies. Another may average plans across metal levels and ages in its own sample.

Several factors can explain the difference: the age mix of the sample, whether Bronze, Silver, and Gold plans are all included, whether subsidies are applied, and which year of plan data was used. Treat each figure as a reference point for its own definition, and compare like with like.

On the marketplace, premiums are set mainly by age, location, plan category, and tobacco use. Health status and sex are not used to price individual market plans under the ACA. Household income does not change the sticker price, but it does change the credit you may receive.

• Metal tier: Bronze plans have lower premiums and higher deductibles. Gold and Platinum plans have higher premiums and lower cost sharing.
• Network type: HMO, EPO, POS, and PPO designs price differently.
• Insurer and county: Two plans with the same tier can differ in price within the same county.