Understanding health insurance costs
The Affordable Care Act (ACA) was created to make quality healthcare more accessible for everyone by connecting individuals and families with affordable health insurance. Through the Health Insurance Marketplace, you and your family can compare and purchase an ACA plan based on important factors such as your unique care needs and budget.
When beginning to shop for coverage, one of the first things you are likely to ask is, “How much does health insurance cost?” Many factors determine the average cost of health insurance for an individual or family plan. Weighing the costs that align with your healthcare needs is essential to choosing a plan that fits your budget and offers the right amount of coverage.
Understanding Individual and Family ACA insurance
ACA Marketplace health insurance plans can be purchased for yourself or your family. They are a reliable option if you do not have access to employer-sponsored coverage and are not eligible for government-run healthcare.
Purchasing coverage through the Marketplace may offer you more flexibility in choosing a health insurance plan that works best for you. You can select a plan based on your unique healthcare needs, and you may qualify for financial help (also known as a subsidy). Subsidies help lower your premium and out-of-pocket costs for care. An estimated 9 out of 10 people nationwide qualify for financial help to lower the cost of their health plan.1
What factors impact the cost of health insurance?
The average cost of health insurance depends on the specific plan you choose. However, it is important to know that different coverage-related expenses will determine the total amount you pay for care.
- Premium: The monthly payment to your insurer to maintain coverage.
- Deductible: The amount you must pay out-of-pocket for care before your plan pays.
- Copays: A fixed amount you pay to a care provider for each visit.
- Coinsurance: The percentage of costs you pay for care after meeting your plan’s deductible.
- Maximum Out-of-Pocket Limits: The most you will pay for your healthcare expenses each year. Once this limit is reached, your insurer covers 100% of eligible healthcare expenses for the remainder of the plan year.
When evaluating how health insurance expenses impact your total costs, you will start to notice the relationship between your monthly premium and your deductible, copays, coinsurance, and more.
Pay higher monthly premium
Pay less for:
- Deductible
- Copay or coinsurance
- Out-of-pocket limits
Pay lower monthly premium
Pay more for:
- Deductible
- Copay or coinsurance
- Out-of-pocket limits
The type of plan you pick also plays a vital role in the overall health insurance costs. All ACA plans offer coverage for health benefits like doctor visits, hospital care, prescription drug coverage, and mental health services. However, plans differ in how you and your insurer share the cost for care. The Marketplace puts plans into four “metal” tiers: Bronze, Silver, Gold, and Platinum. Plans at each tier cover the same essential health benefits, but the difference is in the percentage of costs your insurer pays versus what you pay for care. Wellpoint offers ACA plans at the Bronze, Silver, and Gold levels.
|
Plan |
Bronze |
Silver |
Gold |
Platinum |
|---|---|---|---|---|
|
What Your Plan Pays |
60% |
70% |
80% |
90% |
|
Your Cost |
40% |
30% |
20% |
10% |
Bronze |
|
|---|---|
Plan |
|
|
What Your Plan Pays |
60% |
|
Your Cost |
40% |
Silver |
|
|---|---|
Plan |
|
|
What Your Plan Pays |
70% |
|
Your Cost |
30% |
Gold |
|
|---|---|
Plan |
|
|
What Your Plan Pays |
80% |
|
Your Cost |
20% |
Platinum |
|
|---|---|
Plan |
|
|
What Your Plan Pays |
90% |
|
Your Cost |
10% |
When budgeting your health insurance costs per month, it’s helpful to think about what your unique care needs are right now and what they could be in the future. If you do not typically visit your doctor often, you may be more comfortable choosing a Bronze plan. With this type of plan, you will pay more out-of-pocket for care, but your monthly premium will be lower. However, if you have routine medical care needs and prescription drug costs, choosing a Silver or Gold plan with a higher monthly premium may better align with your budget. These plans allow you to pay less out-of-pocket for copays and coinsurance.
When considering a plan, compare your expected healthcare usage to the plan’s monthly premium and average out-of-pocket costs. This will help you determine if the plan is a good match with your budget while still providing the coverage you need.
How to lower your health insurance costs
While ACA Marketplace plans provide affordable coverage options to individuals and families, there are ways to save on health insurance costs.
- Explore Health Insurance Subsidies: The ACA offers financial help in the form of subsidies to eligible individuals and families. This can help reduce your monthly premium and other out-of-pocket healthcare costs. Eligibility for health insurance subsidies is based on your household income and size (your household includes yourself, your spouse or domestic partner, and anyone you will claim as a dependent on your taxes, regardless of whether they need coverage), as well as the cost of healthcare in your area.
Financial help is available in the form of advanced premium tax credits that you can use to lower or eliminate your monthly premium. Another type of financial help is cost-sharing reductions (CSRs). CSRs can help lower out-of-pocket costs for care, available to those enrolled in a Silver plan. You may qualify for both CSRs and an advanced premium tax credit.
- Choose an HMO Plan: A Health Maintenance Organization (HMO) plan is a health insurance option that limits healthcare services to in-network care providers, but typically offers the lowest monthly premium of most ACA plans. Unlike most HMOs, you will not need a referral to see a specialist when you choose a Wellpoint HMO plan.
- Choose a Plan with a Higher Deductible: If you're generally healthy and do not require frequent medical care beyond preventive visits, opting for a plan with a higher deductible can translate to a lower monthly premium.
- Leverage Health Savings Accounts (HSAs): HSAs are accounts that can help you pay for medical expenses. The money you contribute to your HSA is tax-free or tax-deductible, and you can apply these funds towards your plan deductible, copays, and coinsurance. Plans that pair with HSAs typically feature higher deductibles and lower monthly premiums.
- Explore Your Plan’s Wellness Benefits: One of the goals of health insurance is to promote overall health for plan members. Wellpoint offers Smart Rewards, a member incentive program that allows you and your covered spouse or partner to earn rewards for completing select health and wellness activities.2
Ready to shop plans?
Enter your ZIP code below to find plans available in your area.
Find affordable health insurance with Wellpoint
When navigating health insurance costs, being informed is key to finding comprehensive coverage while managing expenses. Wellpoint can help you explore a range of affordable ACA insurance plans that meet your care needs and budget.
Ready to shop plans?
Enter your ZIP code below to find plans available in your area.
References
1. Centers for Medicare & Medicaid Services: Health Insurance Marketplaces 2024 Open Enrollment Report (2024):
cms.gov/files/document/health-insurance-exchanges-2024-open-enrollment-report-final.pdf.
2. You and your covered spouse or partner can earn rewards for completing health and wellness activities. In some states, you need to complete these activities within 90 days of enrollment. After you complete an activity, you can open the Sydney Health app or go to Wellpoint.com to see how much you’ve earned. You can redeem your rewards for a digital gift card from a selection of retailers. We encourage members to actively participate in the rewards program. Rewards earned should be redeemed before the end of the current plan year. Unused rewards are forfeited three months after the end of your plan year, so members need to make sure to redeem them before then. Rewards eligibility applies only to subscribers and their enrolled spouse/domestic partner. Members must be active on the plan and their activity must take place during the plan year. The reward amount you receive may be considered income to you and subject to state and federal taxes in the tax year it is paid. You should consult a tax expert with any questions regarding tax obligations. Electronic gift card availability may vary. The list of retailers available for electronic gift card rewards redemption is subject to change. Log on to Wellpoint.com or open the Sydney Health app to explore the electronic gift card options available to you. A subscriber and enrolled spouse/domestic partner may earn rewards when eligible activities are completed and, in some instances, they may be verified by a Wellpoint claim.