The US spends a lot on healthcare costs. In fact, healthcare costs are the highest in the US. This gets many people to start worrying about their bills. Are you also someone who no longer has coverage under their parent’s health plan? Or have you graduated from college and are looking to start a new life?

Regardless of your life’s phase, you must start thinking of healthcare costs because everyone must have a health plan in the US. However, a layman finds it difficult to understand the US healthcare system. But don’t you worry. In this guide, we’ll give you in-depth details of insurance costs, and you’ll learn the following:

  1. Differences between the group and individual health insurance
  2. Factors affecting health care premiums
  3. Plan types
  4. Health care premiums for different health plans
  5. Options to lower your cost.

Differences Between Group and Individual Health Insurance

Starting off, you must know where you can get health insurance coverage. Primarily, you can get them from the Marketplace (individual) or from your employer (group). When an employer employs more than fifty full-time employees, they must purchase group health insurance for their employees.

However, the costs tend to be high if you’re employed in a small organization rather than a big conglomerate. Your contribution premium will be low since you’re getting an added benefit from your employer. On the other hand, if you’re a businessman or your employer doesn’t give out group insurance, you can find individual health coverage on the healthcare exchange/Marketplace.

Individual health care is when you purchase a health plan voluntarily and pay for it completely from your income. These individual healthcare insurances have higher premiums than group insurances because employers pay most of the cost in group plans. However, you can choose from a sea of health plans options if you’re trying to get an individual health plan.

Factors Affecting Health Care Premiums

ACA/Obamacare has restricted insurance providers from differentiating health plans based on gender. However, several factors can affect your premium cost. Some of them are as follows:

  1. Age 
  2. Income 
  3. Location 
  4. Tobacco usage 
  5. Metal tiers

1. Age 

Age can play a crucial role in determining healthcare premiums. Some states don’t consider age to determine health plans, but several companies do consider it. The base age is 21, and the premiums are adjusted upwards for ages between the 30s, 40s, and 50s. After 50, you can witness a big jump in healthcare costs because aged people tend to develop medical complications.

2. Income 

Many healthcare plans consider income as a determinant for premiums. Low income can qualify for state-regulated benefits and subsidies to pay a low premium.

3. Location

The US has 50 states with countless counties, making it difficult for insurance companies to reach all the counties. In big cities, there are many providers, increasing competition and reducing healthcare premiums. However, there are remote locations where few providers operate. Therefore, the premiums are high in those places.

4. Tobacco Usage

One of the major determinants to analyze the health risk of people is their tobacco use. Providers charge 50% more premium to smokers as compared to non-smokers.

5. Metal Tiers

Some tiers determine the out-of-pocket cost and premiums you pay. There are four different metal tiers, including bronze, silver, golden, and platinum. The bronze plans have low premiums with high out-of-pocket costs, and this trend moves in the opposite direction as you purchase a high-tier plan. For example, a platinum plan will usually have the highest premium with the lowest out-of-pocket costs.

What Are Plan Network Types and How Can They Affect Premiums?

Besides selecting the metal tiers of a plan, you must choose a plan network type. All of these plan types differ in their premiums and network coverage. Following is brief information on each of them:

  • HMO: HMOs are health plans with a limited network of doctors and hospitals. You need a primary care provider and a referral to see specialists. However, they have the lowest premiums, around $457 for 2022.
  • PPO: These are the most popular plans with a high pool of doctors and hospitals. You can access an out-of-network provider and don’t need a referral. These have the highest premiums, averaging around $522.
  • EPO: These providers have an in-limit network, and you can only access out-network services during emergencies. The premium for EPO plans ranges around $$508.
  • POS: POS is a mix of PPO and HMO. They have a slightly higher provider network than PPO but have lower premiums than PPOs, averaging around $510.
  • Short-term plans: You can get short-term plans if you cannot enroll in ACA plans. These generally last for a year and have lower premiums because they aren’t ACA-compliant.
  • Catastrophic plans: These are low premium plans suitable for people who are under 30, mainly students and young couples.

What Is the Health Insurance Premium for Family and Individuals?

The health insurance premium varies slightly among insurance providers because they can add different services to their health plans. In 2021, the average premium for an individual health plan was around $452 and $1179 for families. However, these can vary across different states. Following is a source from Kaiser Foundation that shows different premiums across states.

Similarly, workers paid an annual premium of $5588 for group insurance plans. In contrast, individual contributions contribute around $1700 in plans sponsored by their employers. Secondly, there is another payment you must consider, i.e., deductibles. You must pay your deductible before your plan can cover for you. 

The deductibles for individuals were around $1644, while they were 1418 for a group insurance plan. 

Options To Lower Healthcare Costs

Since these healthcare costs are quite high, only a small segment of the population can pay for them. Fortunately, there are some benefits and options you can use to lower your costs. Some of them are as follows:

  • State Subsidies: If you earn between 100-400% of the poverty level, you can qualify for state subsidies. They involve giving advanced premium tax credits and help you lower your premiums. You can either get an equal or variable amount each month. You may also opt for getting a credit against income tax liability. 
  • Medicaid: Every state has a Medicaid program that helps cover costs for low-income households and families. If you have income below the poverty level or have a disability, you can be eligible for Medicaid coverage.
  • Medicare: You can opt for Medicare if you’re about to turn 65 years old. It’s state-regulated insurance and has low Part B premiums, averaging around $170 for 2022.
  • HDHP and Supplemental Coverage: HDHP are high deductible plans and often have the lowest premiums. You can pair them up with supplemental coverage that can pay a portion of your co-insurance/co-pays.

Frequently Asked Questions (FAQs)

1. How much does it cost to get medical insurance?

It depends upon your current health, income, age, and plan types. If you opt for a plan type with a platinum tier, you’ll likely pay a premium of around $700.

2. How much do you have to pay for health insurance?

You must pay for your premiums, deductibles, co-insurance/co-pays, and up to your maximum out-of-pocket limit when getting health insurance. These can vary according to the plan type you choose. For a standard silver tier plan, you’ll pay an individual premium of $540 without any subsidy and a deductible of around $1700.

3. How much is good health insurance a month?

A “good health insurance” depends upon your criteria of defining good. If you’re a healthy individual who doesn’t require many doctor visits, a bronze HMO plan will be suitable for you, which will have a low premium and adequate doctor’s network. Alternatively, suppose you have a medical complication, including cancer or liver problems. In that case, you must go for a gold-tier PPO plan that will have high premiums but will expose you to many healthcare professionals.

4. What is an HSA account?

A health savings account (HSA) is a savings account that can help you deposit a sum for your healthcare-related costs. You can only get this if you have an HDHP plan. Their unique feature is that your funds will grow and will be tax-deductible for any healthcare use.

5. What is supplemental coverage?

Supplemental coverage or Medigap is when you purchase more insurance plans that can pay for extended services, including vision and dental care, and pay for your co-pays. They are suitable for having a health plan with large deductibles and high out-of-pocket costs. These also cost less, around $50, and will cover the extra cost you incur. 


Since it’s essential to have any health plan in the US, you must purchase one. However, it can be difficult to find an affordable plan from the Marketplace because there are a lot of providers with a multitude of health plans. Such a wide sea of options might blur your decision-making, and you may end up enrolling in an ineffective plan that doesn’t meet your requirements. 

So, what should you do? At Insurance Shopping, we can help you find customizable quotes according to your preferences. Visit our website to get your free quotes.