What Is a Health Insurance Premium?

Individual and Family

What Is a Health Insurance Premium?

Published on July 13, 2018


Your health insurance premium is the set payment you have every month for your health insurance plan. Unlike other costs associated with health insurance plans, you will continue paying your health insurance premium even after you’ve met your deductible.

What you should know about health insurance premiums

Although there are several important costs and terms to understand about health insurance, the health insurance premium is probably the first thing most people understand about their health insurance plans. It is the cost that most people see first when shopping for plans. So whether you go to the doctor every day, or you never use your health benefits once, your premium is not going to change during that enrollment year based on how much you use your health insurance.

How much does a premium cost on average?

The cost of your premium will depend on several different variables including:

  • the plan you choose
  • the amount of dependents covered by your plan
  • the company who provides the insurance
  • where you live
  • the level of coverage you need

In 2018, the average individual premium is $440 a month and the average family premium is $1,168 a month, according to eHealth data from the beginning of the 2018 Open Enrollment Period.

How can anyone afford a health insurance premium?

It is true, when you have to buy health insurance on your own, rather than receive an employer-sponsored plan, health insurance can be pretty expensive. Seeing the impressive price tags on plans might make you feel like an individual plan is too expensive for you to afford.
Luckily, the above-mentioned prices reflect how much an unsubsidized plan costs. For some people, getting a subsidy could mean the difference between a triple digit premium and a single digit premium.
The Obamacare subsidies that can help individuals and families cover their premium are called “advanced premium credits”.

How do advanced premium credits work?

The government hands out these subsidies on a sliding scale for you to apply to ACA-compliant health insurance plans. If you buy an Obamacare plan on eHealth, we can help you get advanced premium credits (APCs) through the government-run exchanges. We will give you an estimate, and once your application is reviewed and approved, the credits will be applied.
Advanced premium credits are given at the beginning of the year, and are based on family income and size. In order to qualify, you usually cannot have the option to have chosen employer-sponsored health insurance, and need to earn between 100 and 400 percent of the federal poverty level.

To understand how Obamacare subsidies work, watch this video:

Start shopping for plans

Npw that you know what a health insurance premium is, you’re on your way to understanding how health insurance works. The more you know about the breakdown of costs associated with different plans, the better chance you have at choosing one that works best for your needs.
Start searching for individual health insurance on eHealth. You can search for Obamacare plans if you think you might qualify for advanced premium credits, and you can also look at different individual plans and alternatives to major medical health insurance.

We’ll let you know when we publish anything new.