Cost of Health Insurance
Health insurance premiums differ in price depending upon coverage, and different providers offer different rates. For most, average individual health care plan premiums start around $205 and can run upwards of $400, depending on overall benefits and coverage.
Within these options, cost drivers often adhere to a variety of factors. Under the Affordable Care Act (ACA), dubbed ObamaCare, Essential Health Care coverage is provided for both small group and individual plans as of 2014. While Large Group Plans are currently not guaranteed supporters of essential benefit packages, many support working individuals with coverage. The ACA also offers several health insurance plans for individuals, which includes benefits such as ambulatory patient services, emergency services, and hospitalization, preventative services, among others.
How Are Costs Calculated?
Often, contractual arrangements are made with health care providers depending upon "cost drivers," which affect an individual or family's premium insurance plan costs. The cost of health care is typically determined through a variety of factors:
- Health Characteristics: An individual's health is assessed, and different insurance allowances are made depending upon qualifying factors. Costs are often determined by age, gender, health, marital status, tobacco consumption, zip code and occupation.
- Plan Choice: Typically, different plans consume different expense rates. Cost-sharing sometimes amounts to a large cost component, and different benefits are available at different cost levels. Factors that determine the cost of average health insurance plans:
- Deductible: Annual dollar amount paid by the insured.
- Co-insurance: Percentage of insured covered costs following the deductible.
- Co-insurance Maximum: Maximum annual amount the insured is liable to pay.
- Out-of-Pocket Maximum: Maximum dollar amount the insured is liable to pay (in total).
- Co-payment: A per-dollar amount the insured is liable to pay to cover costs following deductible payment.
Help Paying for Health Insurance
Under the ACA, individuals and families are required to obtain and maintain health insurance. For individuals and families who cannot afford monthly premiums, financial subsidies, such as the premium tax credit, are available. Individuals who make between 100 and 400 percent of the federal poverty level are eligible for the premium tax credit subsidy.
In addition, free or low-cost coverage is available through Medicaid or the Children's Health Insurance Program (CHIP). Available in all states, Medicaid provides free or low-cost health care for low-income families and children, pregnant women, the elderly, and people with disabilities. Also available in all states, CHIP provides affordable health care to children in families that earn too much to qualify for Medicaid.
Additional Health Coverage
Beyond the provided health insurance options, there are additional coverage options available in the health insurance marketplace. Each contains individual health plans and family health insurance plans, and costs typically vary depending on coverage, benefits, and physician accessibility. Here are some of the major types of health insurance plans:
- Health Maintenance Organizations (HMOs): Contractual arrangements through health care providers are provided through this insurance company type. Patients are required to see only those providers within the network. Additionally, a referral is required to see a specialist.
Typical cost: $425 monthly and $5,130 annually for single coverage; $1,147 monthly and $13,770 annually for family coverage.
- Preferred Provider Organization (PPO): These organizations contracts health-care providers within a network. Patients do not need a referral for specialist treatment, and they are granted access to external providers.
Typical cost: $427 monthly and $5,124 annually for single coverage; $1,169 monthly and $14,033 annually for family coverage.
- High Deductible Health Plan: These plans are considered "private" health plans. Annual deductibles of at least $1,150 are required for self-coverage; $2,300 is required for family coverage.
- Point-of-Service Plans (POS): These plans combine HMO and PPO plans to grant individuals and families freedom within their selections. Often, customized plans are available.
Approximate cost: $397 monthly and $4,987 annually for single coverage; $1,079 and $13,937 for family coverage.