What is the Average Cost of Health Insurance for a Family of 4? – Overview
Health insurance premiums have risen significantly over the past years due to healthcare costs.
Thankfully, the Affordable Care Act or ACA (also known as Obamacare) has been signed into law to reduce the growth rate of healthcare spending.
This law aims at helping Americans get access to health insurance by creating health insurance marketplaces and by offering government assistance to low-income households.
Unfortunately, most middle-class Americans are not eligible to receive subsidies. As a result, they have to pay non-subsidized health insurance, which tends to be expensive.
To help you get started with your family health insurance plan, we have outlined the usual costs incurred by insured members.
What is the average cost of healthcare plans?
The average monthly costs of health insurance for individuals amount to $574 per month. This includes employer and employee contributions.
Meanwhile, the average cost of health insurance for a family of four is $1,437 for non-subsidized health insurance.
The plan you select affects the monthly premiums you will pay. The more coverage your plan provides, the higher the monthly premium.
Aside from the monthly premiums, you also have to take into account the annual deductibles, the out-of-pocket costs you pay before your health plan covers the rest of your medical expenses, and the copayments.
In 2020, the listed average family plan deductible across all family sizes is $8,439. That’s a 5% increase from the previous year.
What is the total cost for non-subsidized health insurance for a family of 4?
If you are purchasing ACA coverage as a non-subsidized plan for a family of four, you may need to spend about $25,000 annually – this includes the premium, which amounts to $17,244, and deductibles worth $7,767.
If you or one of your family members has a life-threatening medical condition and you can’t afford the treatment grants for medical bills are available by government and non-profit organizations.
Things that affect health insurance premiums
Several factors determine the premium you need to pay for your health insurance. This includes your location, age, health status, plan, as well as the coverage you choose. Let us dive into it.
While some states (including New York, Hawaii, and New Hampshire) do not take into consideration your age when it comes to computing health insurance rates, the majority of states do.
This means older people have higher premiums.
If you are a smoker or have used tobacco within the last 12 months, the insurance provider may add a surcharge on your premium.
As smoking increases your risks of having health issues down the road, depending on the company, individuals may be charged up to 50% more for their health insurance.
Members covered by the plan
The more people you include in your health insurance plan, the higher the premium will be.
However, don’t let high monthly premiums stop you from getting the coverage your family needs. After all, purchasing individual health plans for you and your spouse may be more costly.
Health insurance premiums may vary depending on your location. For example, in 2018, monthly premiums for individual plans in the Northeast have an average cost of $598 but it’s only around $568 in the Midwest.
For family health plans, the premium in the Northwest averaged $1,725 as compared to $1,588 in the South.
Type of Plan
Another factor that affects your health insurance premium is the type of plan and level of coverage you will choose.
Here are the plans available in the health insurance marketplace:
Preferred Provider Organization (PPO) – This plan is one of the most popular in terms of enrollment. If you get this plan, you will be allowed to see any doctor within the network without a referral.
You may also seek the services of providers that are not members of the network but this may require higher payment.
Health Maintenance Organization (HMO) – Those who will enroll in an HMO plan have reduced healthcare costs because of the volume of people covered.
However, you may be limited to using doctors within the network except in an emergency.
Point of Service (POS) – This plan offers lower medical bills if you use physicians, hospitals, and health care providers within the plan’s network. To see a specialist, you’ll still need a referral from your primary care doctor.
Exclusive Provider Organization (EPO) – It is more of a managed plan where you are compensated for treatment if you use physicians and hospitals in the network of the plan unless it is an emergency.