Looking to buy your own health insurance? Here is everything you need to know about the costs of individual health insurance.
According to eHealth, the average of an individual health insurance plan is $440 for an individual and $1,168 for a family.
How much does individual health insurance cost per month?
Individual health insurance is health insurance that you purchase on your own through a government or private exchange, not through an employer. Employer sponsored health insurance is referred to as group coverage.
The monthly payment that you make to your health insurance company to stay enrolled in your individual health insurance plan, is called a premium.
The average cost of individual health insurance premiums is $440 for an individual and &1,168 for a family, in 2018 according to eHealth.
Keep in mind that these numbers are averages and only represent the average cost for monthly premiums. The cost of your premium can vary greatly depending on where you live, how old you are, and how many dependents you have – if any.
The premium isn’t the only individual health insurance cost you need to worry about, you can also expect to have other out-of-pocket expenses such as:
- A deductible
What is a deductible?
A deductible is the amount of money that you have to pay out-of-pocket for healthcare you receive before your individual health insurance kicks in and starts paying for you covered benefits. After you’ve reached this amount, your insurance will generally take over and pay for the rest of any healthcare you receive for the rest of the year so long as it is a covered benefit.
In 2018, the average deductible was $4,328 for an individual and $8,352 for families.
With an individual family plan you may have to meet two deductibles: an individual deductible and a family deductible. This is not true for all plans though, so make sure to check your plan details before buying and make sure you understand how these two deductibles work.
Generally, once you reach the individual deductible your individual health insurance will kick in and pay for the rest of the covered care that individual receives for the rest of the year. You will still have to pay out-of-pocket for care for other individuals until you meet their individual deductible – at which point your individual insurance will generally take over payment – or the family deductible – at which point your insurance will take over payment for all covered care your family receives throughout the rest of the year.
Are there individual health insurance plans with no or a low deductible?
There are, however, no-deductible plans on the market. Zero-deductible plans do not require you to meet a minimum balance before your individual health insurance kicks in. These plans typically come with higher premiums while plans with high deductibles typically have lower monthly premiums. You may also find that an HMO plan has no deductible. Zero-deductible plans may appeal to those who frequently visit healthcare providers or require many prescription medications.
What about individual health insurance plans with a low premium?
On the other hand, plans with lower monthly premiums typically have higher deductible. Higher deductible plans may appeal to those who are healthy, do not visit the doctor often, or do not have many dependents.
Just because these plans cost less per month doesn’t mean that they will always save you money in the long run. You may find yourself paying large amounts of money toward a large deductible if you incur an unforeseen medical expense.
When making the decision between a high premium plan with a low deductible and a low premium plan with a higher deducible consider the medical care you’ve had in the past, what you may need in the future, and if you’re planning on scheduling any procedures in the upcoming year.
What other out-of-pocket expenses can I expect with individual health insurance?
Along with your monthly premium you may have to pay copayments or coinsurances.
Copayments are a fixed amount that you pay for covered benefits after you’ve paid your deductible. So, let’s say you have a doctor’s office visit that costs $150 and you have a copayment of $15. If you:
- Haven’t met your deductible, you’ll pay $150 at the time of our visit
- Have met your deductible, you’ll pay your $20 copay and that’s it
Coinsurances are a percentage of covered health care service that you pay after you’ve paid your deductible. So, let’s say you have a doctor’s visit that’s $150 and a coinsurance of 15%. If you:
- Haven’t met your deductible, you’ll pay $150 for the visit
- Have met your deductible, you’ll pay 15% of $150 (which is $22.50)
Is there a limit on what I have to pay out-of-pocket?
Yes! There are limits to what you have to pay out-of-pocket for health care thanks to out of pocket maximums.
Out-of-pocket maximums, also known as out-of-pocket limits, are the most you have to pay for covered medical expenses in a year. After you spend this amount on deductibles, copayments, and coinsurance your individual health insurance plan will kick in and pay 100% of the cost of your covered benefits for the rest of the year.
According to Healthcare.gov, the out of pocket limit for a Marketplace plan is $7,900 for an individual and $15,800 for a family plan, in 2019.
However, keep in mind that out-of-pocket maximums do not include your premiums.
In general, plans with low monthly premiums usually have higher out-of-pocket maximums, while plans with higher premiums tend to have lower out-of-pocket limits.
What is the difference between the individual health insurance metallic categories?
All Affordable Care Act compliant plans are required to cover 10 essential benefits (which include benefits like hospitalization, maternity care, and prescriptions), however each health insurance company can choose how they want to cover these benefits. The metallic levels help buyers understand what percentage of those benefits – as well as potentially other health care benefits – their plan will cover.
To help make it clear how much coverage you will receive when purchasing a given health insurance plan, plans are ranked from most to least coverage using metallic categories (bronze, silver, gold, platinum).
- Bronze – on average, the insurance company pays for 60% of covered medical expenses and you will pay the remaining 40%
- Silver – on average, the insurance company pays 70%, you pay 30%
- Gold – on average, the insurance company pays 80%, you pay 20%
- Platinum – on average, the insurance company pays 90%, you pay 10%
The percentage of the total average costs for covered benefits that a plan will pay is also referred to actuarial value.
Please note that the above numbers are averages for how healthcare costs are split between insurance companies and a typical population as published by healthcare.gov. Your costs will vary.
A Bronze plan may be right if you’re looking to protect yourself from a worst-case scenario medically, like a serious sickness or injury, since the premiums are low. However you will have to pay for a lot of routine medical care out-of-pocket since most of these plans have a high deductible.
According to eHealth, average premiums for individual plans were $374 with an average deductible of $7,148 in 2017. For family plans, the average premium was $903 with an average deductible of $12,044 in 2017.
According to eHealth, bronze plans are the most popular among eHealth customers (47%).
A Silver plan may be a good choice for you if you can afford a slightly higher premium than what you would get with a bronze plan so that more of your routine care – like physicals and preventative visits – are covered by insurance. Also, if you qualify for cost-sharing reductions you must enroll in a silver (or higher metallic level) plan to receive those cost-sharing reductions.
According to eHealth, the average premium for an individual silver plan was $418 with an average deductible of $2,758 for an individual in 2017. For family plans, the average premium was $1,061 with an average deductible of $5,424 in 2017.
According to eHealth, silver plans are the second most popular among eHealth customers (33%).
A Gold plan may the right choice for you if you are willing to pay more each month to have more costs covered when you receive medical care. If you or someone in your family requires a large amount of or frequent medical care than a gold plan may be a good choice for you.
According to eHealth, the average premium for an individual gold plan was $502 with an average deductible of $778 for an individual in 2017. For family plans, the average premium was $1,252 with a deductible of $1,835 in 2017.
A Platinum plan has the highest amount of actuarial value at 90%. Additionally, premium plans tend to have the highest premiums with very low deductibles – meaning your plan will kick in earlier in the year than other plans. This metallic plan is a good choice if you can pay a high monthly premium knowing that most of your medical bills will be covered. A platinum plan may be a good choice if you or a family member requires a large amount of or frequent medical care.
According to eHealth, the average premium for an individual plan was $575 with an average deductible of $37 in 2017. For family plans, the average premium was $1,472 with an average deductible of $140 in 2017.
What Is a Catastrophic health insurance plan?
For those looking for coverage who are on a tight budget, catastrophic plans may be a good option.
Catastrophic plans have low monthly premiums and very high deductibles. They are a great way to protect yourself from high medical costs and worst case scenarios – for example getting a serious illness or injury. However, you will end up paying most routine medical expenses yourself.
Keep in mind that you can’t use premium tax credit to reduce the cost of a catastrophic plan.
Catastrophic plans cover the same essential health benefits as other ACA-compliant plans and, like other plans, they cover certain preventative services at no cost. They will also cover at least 3 primary care visits before you reach your deductible per year.
Catastrophic plans are only eligible to those who:
- Are under 30
- Or a person of any age who qualifies for a hardship exemption or affordability exemption (which is based on marketplace or job-based insurance being unaffordable)
You will only be able to enroll in a catastrophic plan if you are under 30 and if you qualify for a hardship exemption (this includes affordability exemptions). If you are over 30 and wish to enroll in a catastrophic plan, you must submit an application to qualify for hardship or affordability exemption application and receive an exemption certificate number.
You may qualify for a hardship exemption if you:
- Were homeless
- Evicted or facing eviction
- Experience domestic violence
- Experienced the death of a family member
- Experienced a fire, flood, or natural or human-caused disaster that caused damage to your property
- Filed for bankruptcy
- Had medical expenses you couldn’t pay
For a longer list of hardship exemptions, visit healthcare.gov. If you experienced another hardship not listed here or on healthcare.gov’s website, you can use this form to describe the hardship you experienced and apply for an exception.
What is an HSA?
An HSA, or a health savings account, is a tax-advantaged account (as the funds are contributed using pre-tax income) who are covered under individual health insurance – and group insurance – plans with a high deductible. These accounts help you save for out-of-pocket expenses and medical expenses that their plans do not cover.
Contributions are made into the account by you, or your employer, up to a maximum limit per year. The contributions are invested over time and may be used to pay certain qualified medical expenses – which include care such as dental, vision, over-the-counter medications, and other benefits not covered by your individual health insurance.
It is important to know that for 2019, the maximum contribution limit for an individual’s HSA is $3,500 and $7,000 for families. Individuals who are 55 or older by the end of the tax year can contribute $1,000 more to their HSAs.
You usually cannot use your HSA funds to pay your individual health insurance premium, but you can use this money to pay for expenses before you reach your deductible.
If you make a withdrawal from your HSA for a reason other than paying for a qualified medical expense, the withdrawal will be subject to income tax and an additional 20% penalty.
If you are 65 or older you will no longer be able to contribute to an HSA but you may withdraw funds without occurring a 20% penalty, however the withdrawal will be subject to income tax.
There are also FSAs, or flexible spending accounts, which are set up by an employer for an employee and generally all money set aside in the account must be used by the end of the plan year.
Can I get government assistance to help lower the cost of my individual health insurance?
Yes, you can receive government subsidies to help lower the cost of individual health insurance that are called premium tax credits and cost-sharing reductions.
You may receive one type of assistance – or both – depending on how much your income is above the federal poverty line (FPL).
Every year the government benchmarks the federal poverty line at a particular income (for example, $12,140 per year). Your eligibility for ACA subsides – and other forms of governmental assistance – is based on how much your income is above or below this number.
Those who make between 100% and 400% of the FPL per year may qualify for both premium tax credits and/or cost-sharing reductions.
2018 Poverty Guideline for the 48 Contiguous States and the District of Columbia
|Persons in Family/Household||100% of Federal Poverty Line||200% of FPL||300% of FPL||400% of FPL|
Households with more than 8 members, add $4,320 for each additional person.
The above numbers are from the 2018 HHS poverty guidelines, which the Federal Register published on January 18, 2018. Eligibility for the ACA subsidies for 2019 are based on these guidelines for 2018.
Additionally, other factors such as age, household size, and location can seriously effect if you are eligible for ACA subsides.
There are two types of ACA subsides – which are also referred to as Obamacare subsides. The more common kind that people get are called “Advance Premium Credits”. Premium tax credits are subsides that you qualify for at the beginning of the year and help you pay for the cost of individual health insurance premiums.
Make sure that if you do receive advanced premium tax credits and experience a change in income that you report your change in income as soon as possible
When it comes to advanced tax credits, you report your projected income at the beginning of the year. If you end up making more than you originally reported, you could expect to owe money back on your taxes.
Be sure to report changes in income to make sure you don’t miss out on assistance if you become eligible or have to pay money back during tax season.
The second kind of subside is called the Cost-Sharing Reduction (CSR) subsidy. They are unlike advanced premium credits, CSR subsides
- Only apply to coverage at the silver level
- Mostly reduce out-of-pocket charges such as deductibles, co-pays, or coinsurances, but can also reduce the annual out-of-pocket limit
Additionally some groups of Native Americans may also qualify for additional cost-sharing subsides.
If you are interested in if you qualify for CSRs, you can find a CSR calculator on HealthCare.gov.
What other government assistance is available?
Depending on how much your household income is per year, you may qualify for government assistance to afford coverage for you and your family.
In all states, Medicaid provides health insurance for some low-income people and families. Some states have expanded Medicare to cover all people who make below a certain amount, some haven’t.
In all states, however, you can qualified for Medicaid based on income, household size, disability and other factors. The eligibility rules differ between states. Generally if you live in a state that has expanded Medicaid, you may qualify if your income is below the 133% of the poverty line.
You may qualify for CHIP, or the Children’s Health Insurance Program, if you have a difficult time affording health insurance for you and your family. CHIP is a federal-state effort to provide inexpensive or sometimes free health insurance for families with children.
If you make too much money to qualify for Medicaid but have an income below 200% of the FPL you may qualify for CHIP.
You also may be able to qualify for Medicare if you are 65 or older (even if you don’t want to retire) or if you are a younger person with a disability or have end-stage renal disease.
If you want to know if you are eligible for assistance, you can use this Healthcare.gov tool to see if you may qualify.
Additionally, there are other state and federal programs that you may be able to qualify if you have at least a family of four and make less than $99,000 per year.
How much does supplemental insurance cost?
In addition to an individual health insurance, you can receive additional coverage if you choose to purchase supplemental insurance products.
These plans offer you extra coverage for worst-case scenarios – such as serious illnesses or injuries – at low monthly costs.
A few examples of supplemental insurance include dental and vision insurance as well as critical illness insurance or disability insurance.
You may want to purchase supplemental insurance if you have a high risk job or hobby or if you want extra insurance for peace of mind.
Critical Illness or Disease Specific insurance is a type of supplemental insurance that provides cash benefit directly to you if you require treatment for a serious illness such as cancer. You do not have to spend this money on qualifying expenses you may spend it in any way you’d like. According to eHealth the average premium for critical illness insurance for 2019 was $34 for individuals and $63 for a family.
Accident health insurance or Accidental Death and Dismemberment Insurance is a kind of supplemental insurance that reimburses you for medical costs resulting for an accident. If you die, the benefits are paid to your beneficiaries. According to my family life insurance, the cost of accident insurance is generally anywhere from $25-$50 per month on average.
Start shopping with eHealth today for an individual health insurance plan that is right for your needs and your budget.