How Much Does U.S. Health Insurance Cost? – Zupnick Associates

(By Louis Toffoli)

The U.S. private health insurance sector is an industry worth billions, providing coverage for 67.3% of Americans. While it is the most prevalent option among the U.S population, it has also been a frequent topic of debate. 

Many Americans believe the cost of health insurance coverage is too high, with premiums that are hard to manage financially. However, the differences in expenses change dramatically depending on several factors. 

So, how much does U.S health insurance cost? To help answer this question, we created a brief overview of the average United States health insurance costs. 

Health Insurance Costs by Age 

One of the critical factors that will determine your health insurance costs will be your age. As you get older, the likelihood of needing medical care rises. To prepare for these expenses, an insurance company will raise your insurance rates to match the risk. 

To begin, insurance companies will start by basing the minimum rate on a policyholder who is 21-24 years old. For a silver healthcare plan, the average cost is $200 per month. This cost is in the middle tier of insurance plans, but the prices can rise depending on your needs. 

As we look at the age brackets for health insurance costs, they slowly rise in small increments until 50 years old. For a quick rundown on the premiums by age, here are the base rates for each age group: 

  • 21-24 have an average cost of $200
  • 26-30 have an average cost of $205 to $225
  • 31-40 have an average cost of $244 to $256
  • 41-50 have an average cost of $335 to $425
  • 51-60 have an average cost of $446 to $553
  • At 64 years old, the insurance premiums cap is at the cost of $600 

From this table, you will notice that the insurance premiums will rise drastically between the ages of 50 and 60. At 64, the insurance prices hit their max, and many retirees begin to enroll in Medicare. This age range includes the highest risk to the insurance company for members seeking extensive healthcare. 

While these are the average costs of health insurance, the price is highly dependent on the type of plan. Fortunately, health insurance companies can no longer charge more for those who suffer from pre-existing conditions. 

Health Insurance Costs by Area 

Age is an important determining factor for your private health insurance premiums, but your area and state also make a significant difference. For starters, if you live in a rural part of your state, you will most likely pay more than someone in an urban environment. 

In the latest survey, rural residents paid an average of 10% more per month for the same health insurance plan as urban-area residents. The cause of these higher prices is the lack of competition in these less-populated areas. 

The lower population also increases the insurance company’s risk, as they cannot spread out the financial risk among as many people. Your area is not the only factor, with your state also playing a massive role in your health insurance costs. 

To keep the results consistent, we will be using the costs based on a policyholder who is 40 years old. The costs are an average of each tier of coverage plans. At the top of the list, some of the most expensive states to be a health insurance policyholder are: 

  • West Virginia ($712)
  • New York ($701)
  • Wyoming ($670)
  • Vermont ($649)

These states hold the highest insurance premiums, with a common theme being the states with smaller populations like Wyoming and Vermont costing more. Now, let’s take a look at the states that have the least expensive insurance premiums. 

  • New Hampshire ($335)
  • Maryland ($344)
  • New Mexico ($350) 
  • Minnesota ($362)

Employer Health Insurance vs Individual Plans 

First introduced in 1929, employer health insurance plans have helped employees with their medical expenses for decades. In almost all cases, a health insurance plan provided by your employer will cost less than having an individual plan. 

This cost reduction is possible because your employer will often split the costs of the insurance premium with you. In 2021, the estimated cost for premiums and out-of-pocket costs for employees is $14,769 per year for a family. Each subsequent year, the price of these premiums will typically rise 3.8%

Such an employee health insurance plan will have an average deductible cost of $3,655 per family or $1,931 per single person. These costs will differ depending on the type of coverage plan and your location.

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