The cost of health insurance in the Affordable Care Act (ACA) marketplace varies depending on the insurance company, where you live, the plan you choose, how many people are covered, your age, whether you smoke, and the family size and household income .
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what are the average costs of health insurance?
The average monthly premium for a bronze health insurance plan is $928. average monthly costs increase to $1,217 for a silver plan and $1,336 for a gold plan. Those averages don’t take into account premium tax credits and subsidies that can lower the costs of an ACA plan based on household income.
Here’s a look at the average health insurance premiums in the market here for four of the largest health insurance companies.
how to calculate and compare health insurance costs
Choosing the best health insurance plan for you involves looking at your budget, your current health, what you hope for in the next year, and what you want from a health plan.
premiums vs. deductibles
Health insurance plans generally have higher premiums/lower deductibles or lower premiums/higher deductibles. What you choose affects how much you’ll pay in premiums each month and how much you’ll pay out of pocket when you need care.
A high-deductible health plan might be a good option if you don’t expect to need a lot of care over the next year. Health insurance companies don’t start contributing to pay for health care services until you meet your deductible. Once you meet your deductible, you generally pay coinsurance, which is when you and the health insurance company share the costs of health care services.
For example, this could mean you pay 20% and the health plan pays 80% until you reach your plan’s out-of-pocket maximum.
When choosing a health plan, estimate how much you’d pay in health insurance premiums for a year and consider the deductible. Would the lower premiums save you enough to make it worth paying a higher deductible? Or can you pay higher premiums knowing you’ll save money if you need care during the year?
If you expect to need health care services, especially if you’re expecting a child or planning surgery, a health plan with a higher premium and lower deductible might make sense. But if you don’t expect to need a lot of health care services, a high-deductible health plan might be a good option.
If you’re looking for a plan here, the bronze and silver plans have higher deductibles, but you pay less in premiums than you would for a gold or platinum plan. gold and platinum plans have higher premiums, but you pay less out of pocket when you need care.
plan benefit design
A plan’s benefit design influences its flexibility and the cost you pay for health insurance. hmo and epo plans are the most common types of health insurance plans found on the aca market. ppo and point of service (pos) plans are also offered on aca exchanges, but are not as common on the market.
Here’s a look at the differences between the four perk designs:
differences in health plan benefit design
hmos and epos typically have the lowest premiums, but they also don’t allow out-of-network care. Those plans generally only pay for out-of-network care if it’s an emergency. hmos and epos require you to stay within their provider network. hmos also often require that you get referrals from primary care providers to see a specialist.
ppos and epos generally allow you to get care outside of your provider’s network, but at a higher cost than getting care in-network. that flexibility often comes with higher premiums, too.
Decide how much flexibility you want and whether you’re willing to pay more for coverage. If you want the cheapest health insurance and don’t mind staying in the provider network, an HMO or EPO might be a better option.
factors that influence health insurance costs
the aca allows health insurance to use multiple factors when setting health insurance premiums. this is what influences the costs in the market here.
Marketplace insurance companies here use a person’s age when setting rates, which is different from the employer-sponsored health insurance marketplace. Here’s a look at how a person’s age influences the cost of a health plan.
average cost of aca market plan by age
where do you live
Your location influences how much insurance companies charge. Insurers in states that have fewer health insurance plans on the market may charge more for coverage, since there are fewer companies to share the cost of providing health insurance in that area.
rural areas may have fewer health plan options, so people in those regions may pay more for care than people in urban and suburban areas.
if you smoke
the aca allows insurance companies to set higher rates for smokers in the market. A health insurance company can charge a smoker up to 50% more than a non-smoker.
Metal tiers on the market here help consumers choose plans based on cost. the metal stands are bronze, silver, gold, and platinum.
bronze and silver, which have lower premiums and higher deductibles, make up the majority of health plans here. gold health plans have higher premium costs than bronze or silver plans, but lower out-of-pocket costs. Platinum plans, which have higher premiums and lower deductibles, comprise a small fraction of ACA plans.
The metal tier you choose depends on whether you want to pay higher premiums or higher deductibles.
how many people are covered
Having only one coverage costs less than having multiple people on your health plan. Here’s how adding people to your health plan affects health insurance costs.
type of health plan
The benefit design of a health plan affects costs and how you receive care.
hmos and epos generally have the lowest premiums, but you must stay within the plan’s network of providers. Health insurers generally won’t cover non-emergency care you get out-of-network in an EPO and HMO. instead, you must bear all costs.
ppos have the most flexibility to get care outside of their network and you don’t need to name a primary care provider or get referrals to see specialists.
You need to decide if flexibility or lower premiums are more important to you if you’re comparing a ppo to an hmo or epo.
your household income
the aca marketplace offers premium tax credits and cost-sharing subsidies based on your household income. that can save you money on your premiums and out-of-pocket costs.
People with household income at or below 400% of the federal poverty level are eligible for premium tax credits. Those with silver plans can also get cost-sharing subsidies that lower out-of-pocket costs.
the aca marketplace will take those factors into account when you enter your household income and family size on the exchanges.
This is what constitutes a federal poverty level of 400% in 2022.