How Much Does Health Insurance Cost?

No matter how you get it, health insurance is expensive. The average American family spends about 4% of their income on health insurance.^[1]

Most working-age Americans get health insurance through an employer or the federal Health Insurance Marketplace.^[2] Adults 65 and older get health coverage through Medicare, while some qualifying Americans get coverage through Medicaid.

Many factors affect how much you pay for health insurance, including how you get it and who it covers. Here’s what you need to know about real-world price ranges, cost factors, and how to shop for insurance if you don’t qualify for Medicare or Medicaid.

What’s the average cost of health insurance in 2025?

The average cost of health insurance depends on whether you have a plan through the Affordable Care Act (ACA) Marketplace or an employer-sponsored plan:

• The national average annual premium for a single-person, mid-level marketplace plan is $5,964.

• The average annual premium for a single-person, employer-sponsored plan is $1,368, with employers covering an average of $7,584.

Keep in mind, you’ll pay more for a family plan. On average, workers with employer-sponsored health insurance pay $6,296 annually for family coverage.^[3]

Additional health insurance expenses

Premiums are only one cost associated with health insurance. You’ll need to consider additional expenses when budgeting for health insurance:

• Copay: A fixed amount that’s due to your provider at the time of service. These average $26 for a primary care visit and $42 for specialist visits.

• Deductible: The amount you pay out of pocket before your insurance coverage kicks in. The average deductible amount in 2024 was $1,787. But yours could be much higher if you choose a high-deductible health plan.

• Co-insurance: The percentage of the cost of service you’ll pay once you’ve reached your deductible. The average co-insurance rate is 20%.

• Out-of-pocket maximum: The maximum amount you’ll pay for covered services in the plan year (includes copays, deductibles, and co-insurance).

Your exact cost for health insurance will vary depending on many factors, including where you get your plan from (typically either your employer or the healthcare marketplace), the type of plan you purchase, your age and gender, your health history, and more.

Generally, the types of plans are:

• Exclusive provider organization (EPO): Covers care only from a set network of providers.

• Health maintenance organization (HMO): Limits your care to providers who work with the HMO. HMOs typically won’t cover non-emergency out-of-network care.

• Point of service (POS): Your costs are lower if you use in-network hospitals, doctors, and other providers. You’ll typically need to get a referral from your primary care doctor to see any kind of specialist.

• Preferred provider organization (PPO): You can use any provider, but you’ll pay more out of pocket if you see an out-of-network provider. And you typically don’t need a referral to see a specialist.

If you buy your insurance from the ACA Marketplace, you may have the option to choose any one of these types of plans. But if your coverage is through your job, you might have only one or two options to choose from.

How much does employer-sponsored health insurance cost?

Employer-sponsored health insurance is often cheaper than marketplace plans because employers typically pay the larger share of the premium. This results in a lower monthly premium for you.

On average, employees pay 16% of the premium for individual coverage and 25% of the premium for family coverage — although smaller companies tend to pay a larger share of the premium. Here’s how that looks in real money:

Plan Type	Annual Employer Cost	Annual Employee Cost	Total Annual Premium
Single	$7,584	$1,368	$8,951
Family	$19,276	$6,296	$25,572

Some firms may also offer plans for couples. Others might offer incentives, like additional compensation, if your spouse enrolls in health insurance from another source. Other sources might include their own employer-sponsored plan or the healthcare marketplace.

Factors that affect the cost of employer-sponsored health insurance

Insurance companies base your premium on several factors. Here are the most common factors that can influence your monthly health insurance costs:

• Age: Older workers will likely pay more because they’re more likely to use the coverage. Younger workers usually have a lower premium.

• Location: Health insurance may cost more in some states and cities than in others.

• Tobacco use: Smokers have a higher risk of illness and may pay more for health insurance than non-smokers. Some states prohibit insurers from considering tobacco use as a factor.

• Your share of premiums: The more your employer covers, the lower your premium will be.

• Deductibles: Generally, a higher deductible equals a lower premium, and vice versa.

• Co-insurance, copay, and out-of-pocket maximums: The more you pay for these, the less you’ll likely pay for coverage.

• The type of plan you choose: Employer-sponsored plans are typically more affordable than marketplace plans because employers can negotiate special group insurance rates with the insurer.

• Who your plan covers: An individual plan will cost less than a family plan that covers you, your spouse, and any dependents.

• The size of your company: Larger firms often have more negotiating power with insurers to lower the cost of group healthcare coverage.

How much is health insurance through the open marketplace?

Health insurance through the open marketplace costs an average of $497 per month. The marketplace breaks its coverage into four tiers (Bronze, Silver, Gold, and Platinum). Here’s how premiums vary between each tier:

Healthcare Tier	Average Monthly Premium	Average Annual Premium
Bronze plans	$381	$4,572
Silver plans	$486	$5,832
Gold plans	$507	$6,084

You’ll need to get a quote to determine how much you’ll pay for a Platinum plan, because average costs aren’t readily available for this tier.

Also, if you’re younger than 30 or qualify for hardship or affordability exemptions, you can get a Catastrophic plan. These plans typically cost less but cover you if you get seriously injured or sick.

Factors that affect the cost of marketplace health insurance plans

The open marketplace uses many of the same factors that employer insurance providers use to determine premiums. These factors include age, location, tobacco use, individual versus family enrollment, and health insurance plan types.

But the open marketplace has some unique factors that affect the cost of coverage, including:

• Plan tier: Bronze plans usually have lower premiums but higher out-of-pocket costs. Platinum plans typically have higher premiums and lower out-of-pocket costs. The rest fall somewhere in the middle.

• Subsidies: Depending on your income level, you may qualify for subsidies to help you afford health insurance.

The ACA Marketplace has two types of subsidies:

• Premium tax credit: Subsidizes your health insurance costs with a tax credit if your income is between 100% and 400% of the federal poverty level.

• Cost-sharing reduction (CSR): Reduces your out-of-pocket costs (like copays or co-insurance) when you get medical services. You’ll need to buy a Silver plan to get this reduction in addition to your premium tax credit.

As with employer-sponsored plans, insurers can’t charge higher premiums if you have a pre-existing condition.

How to estimate your health insurance costs

It’s a good idea to get an estimate of plan costs before choosing your health insurance. You can estimate your costs by:

• Using your employer’s benefits portal during the enrollment period to compare the costs of each available plan.

• Using an ACA subsidy calculator to compare the costs of different plans on the open marketplace.

A health insurance marketplace calculator uses basic information about you and your desired insurance plan to determine your eligibility for financial help. It can also estimate the amount of help you may receive. 

To get an accurate estimate, follow these steps:

• 

  1. Calculate your expected annual household income

  You’ll need to determine your household’s adjusted gross income (AGI), which is your income before deductions. Include the income of everyone in your household — even if they don’t need health coverage.

• 

  2. Consider your household size

  Include yourself, your spouse, and any dependents listed on your tax return, even if they don’t live with you.

• 

  3. Plug the info into a subsidy calculator

  These calculators will also ask for your age, gender, current health coverage information, and employer information.

• 

  4. Compare metal tier quotes

  Once you’ve entered your information, the calculator will show you the available plans and their costs. Compare these quotes to determine the best one for your coverage needs and budget.

How to lower your health insurance costs

Health insurance is rarely cheap. But you can take steps to control the costs. The following tips may help you save money on your premiums:

• Choose the right tier if you’re shopping in the marketplace. Bronze and Silver plans are generally less expensive than Gold and Platinum plans.

• Check for state-funded health insurance subsidies, which can make coverage more affordable.

• Use a health savings account (HSA) if you’re eligible for one. An HSA is a type of tax-advantaged savings account that can help cover qualified medical expenses.

• Maintain your health by eating a balanced diet, getting sufficient sleep, and avoiding tobacco to help reduce your healthcare costs.

• If you’re buying on the marketplace, compare quotes year to year to ensure you’re not paying more than you can afford.

• Review your health insurance options and needs annually during your employer’s open enrollment period. High-deductible plans usually have lower premiums than low-deductible plans.

Health insurance average cost FAQs