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What is the average cost for health insurance?

The recent changes in the health insurance world have led many people asking, “What is the average cost for health insurance today?” This is a very valid question and an important one if you are in the market to find your own health insurance.

The national average cost for health insurance is $440/month per individual (based on 2018 data). Obviously, this average will fluctuate when you look at each state independently. However, this average has increase 123% for individual plan premiums over a 10 year period from $159 per month to $440 per month. Likewise, the average family plan health insurance premiums have increased 174% in a ten year period from $369 per month to $1168 per month.

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Average cost for health insurance

Another fact to consider is that this average cost for health insurance is based on the full price. There are some people who qualify for a subsidy which can lower the cost of their premiums significantly. The amount of the subsidy (which comes in the form of a tax credit) is dependent upon your projected adjusted gross income. Don’t let this come back to bite you! Try to be as accurate as possible when projecting your income. If you end up making more money than you originally projected, you will be required to pay back some or ALL of the tax credit. This can be difficult for self-employed individuals, or people with a fluctuating income situation. For those who have a steady salary or can easily project their income, it will be much easier to project the correct amount.

If you happen to be someone who is on a group plan provided by your employer, you may or may not have experienced a rate hike this past year. While most group plans experienced an increase in premiums, some employers were willing to absorb the cost increase and not allow the employee shoulder that burden. Other employers passed along the cost increase to their employees.

Some group plans did not experience a rate increase with their premiums, but they saw an increase in their deductibles. This does not increase the cost for the employer, but the employee ends up shouldering the burden of a higher premium before any significant benefits kick in.

Why have health insurance premiums gone up so high? Prior to 2014, most health insurance plans did not accept all pre-existing conditions. This all changed with the implementation of the Affordable Care Act (ACA). This new law required all compliant plans to accept all pre-existing conditions as well as mandated these plans to include certain essential benefits. Since 2014, health insurance companies have found it necessary to make adjustments to their premium costs in order to compensate for the increased amount of medical care that is being paid for.

Just to be clear, the average cost for health insurance listed above is referring to the monthly premium. This is not the entire cost of your health care. When choosing a health insurance plan be sure to look at the whole picture. Other areas that you must consider in your overall cost is: deductibles, copays, coinsurance, and non-covered areas.

So, the average cost for health insurance listed above may be reflective of the monthly premium, but not the entire cost. Many people have experienced a lower TOTAL average cost of health insurance when selecting a private insurance option over a marketplace plan. These private insurance options often times come with a lower premium, lower deductibles, and lower copays. Also, these private insurance plans are not “marketplace” plans which means they are not required to fulfill all of the previously mentioned mandated areas of coverage. In other words, a healthy 45 year old male can get a private insurance option for less than a marketplace plan because he would not want to include maternity coverage on his plan. If this same individual chose a marketplace plan, it would include maternity coverage even though he could never use it. Simply put, major medical plans (marketplace) have a broader scope of coverage, whereas private insurance plans have a more focused scope of coverage. Another benefit of private insurance is that they are not limited to “open enrollment”. You can obtain these plans at any time of the year.

If you need help choosing a plan that is right for you, it is usually beneficial to seek the help of a qualified health insurance consultant. A health insurance consultant can help you look at the entire plan and evaluate the cost vs benefits. Be sure to explore your options and balance affordability and peace of mind. You may be surprised to find an option that costs less than the average cost for health insurance.

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