How Much Is Health Insurance in 2023?

Having adequate health insurance coverage is an important part of keeping you and your family healthy and financially protected. You can get healthcare coverage through your employer or the Affordable Care Act (ACA) marketplace. And you can typically purchase healthcare plans for individuals, or they can include eligible family members. Health insurance costs around $300 to $700 a month, depending on the health plan type, number of covered people on the plan, and coverage level.

Health insurance premiums have been rising steadily in recent years, though. Here’s a look at how much health insurance costs in 2023 and what to expect when buying coverage.

How much does health insurance typically cost? 

The amount you pay for health insurance in the U.S. depends on many factors, such as the number of people insured and the level of coverage you choose. The average U.S. annual health insurance premium in 2022 was $7,911 for individuals and $22,463 for families. 

Rates have risen more than 20% overall since 2017 and by more than 43% since 2012. But 2022’s numbers are a relatively modest climb from 2021, when individuals paid $7,739 and families paid $22,221 a year.^[1]

Factors that influence health insurance costs

Many factors affect how much you’ll pay for health insurance coverage, and each can increase or decrease your premiums. Whether you’re choosing from your employer’s plan options or buying an individual policy on your own, here are some top factors to keep in mind when shopping for a new policy:

Coverage-related factors

First, some health insurance cost factors are specifically related to the coverage itself. If you buy a plan that offers more comprehensive coverage, you can usually expect to pay more than someone who buys basic coverage, and vice versa. If your policy insures more people, expect to pay more than if you only bought coverage for yourself.

• Health plan type: The type of healthcare plan you buy determines not only how much coverage it provides but also how flexible that policy is when you use it. For example, an HMO plan requires you to see medical providers within the plan’s contracted network, which can be a bit limiting and requires you to choose providers from a predetermined list. Meanwhile, a PPO plan allows you to choose your own doctor.^[2] Expect to pay more for your plan if you want a larger network or more flexible coverage.

• Number of people covered: As you might expect, you’ll pay more for health insurance the more people you have on your policy. Some plans may base rates on individual coverage versus family coverage, while others may have tiered pricing based on the number of insured people.^[3]

• Tier: You’ll also pay more (or less) for your health insurance plan depending on how much coverage you want the plan to provide when you seek medical care. When buying through the Affordable Care Act (ACA) healthcare marketplace, these plans are separated by metal tiers: bronze, silver, gold, and platinum. The most affordable coverage is bronze, which offers lower premiums in exchange for less coverage, while the most expensive type of plan (platinum) offers more coverage for a higher premium. 

Personal factors

If you get your health insurance coverage through an employer-sponsored plan, your personal factors will have little to no impact on your premium costs — everyone covered under the plan will pay the same amounts. However, if you purchase individual health coverage, some pricing factors are specifically related to you, the policyholder. While some of these personal factors won’t affect premiums and can’t prevent you from obtaining coverage, others can still influence the price you’ll pay for your policy.

• Age: Insurers can — and usually do — charge higher premiums the older you are. Thanks to the ACA, age-related premiums are capped at no more than three times the premiums for older applicants compared to younger ones.

• Location: Healthcare costs can vary greatly from one area to the next, and insurers charge premiums accordingly. While you need to shop around to see exactly how your area affects your rates, you can usually expect that living in an urban, high-cost-of-living area may result in higher health insurance premiums.

• Smoking status: Tobacco use can play a notable role in your overall health and personal risk factors. Smoking can increase your chances of conditions such as hypertension, cardiovascular disease, and lung cancer, while smokeless tobacco can make you more likely to be diagnosed with oral cancer. If you’re a smoker or tobacco user, expect your insurance company to charge up to 50% more for your coverage compared to a non-smoker.^[3]

• Household income: Even how much you make can affect how much you’ll pay for health insurance coverage, particularly when buying through the ACA’s healthcare marketplace. Your health insurance costs are based on your predicted income for the year, rather than your previous year’s income.^[4]

Check Out: The 10 Best and Worst Medicare Advantage Plans

Understand health insurance cost basics

When shopping for and choosing the best health insurance policy for you, you’ll want to consider a few important things. Understanding the basics can help you choose the plan that provides the right coverage at a price that works for your budget.

Keep your overall financial situation in mind; your budget is one of the most limiting factors when evaluating which plan you can afford and what makes the most sense. However, you also want to calculate how much you can afford to pay out of pocket in a year. Be sure to do the math on how much each plan will cost you for upcoming care.

Here are some basic factors to keep in mind when estimating your health insurance costs.

Premiums and deductibles

Your premium is how much you pay annually for your policy, often broken into monthly payments. Your deductible is the amount of care expenses you need to cover out of pocket each year before your insurance company will kick in to cover the rest.^[5]

The higher your deductible, the lower your premiums will typically be. However, if you want to pay less out of pocket for your medical care throughout the year, you can choose a low deductible and take on a higher premium instead. Plans have their own deductibles, copays, and cost-share options.

What benefits do you value in your plan?

How you use your policy and what you want out of your coverage will likely be unique, and you should take this into account when shopping for the perfect plan for you.

• Exclusive provider organizations (EPOs) only allow you to see providers in their networks, including hospital visits, unless it’s an emergency. If you want to see another doctor or specialist, you’ll pay for it yourself.

• Health maintenance organizations (HMOs) also only allow you to see doctors and care providers in their defined networks, except in emergency situations. These providers have contracts with the insurer, so prices are set — as are the insurer’s cost-share and reimbursement levels. If you want to see a provider outside of this network, expect to pay entirely out of pocket.

• Point-of-service (POS) plans offer discounted care if you use doctors or facilities in the contracted network. If you need to see a specialist, you need a referral from your primary care physician.

• Preferred provider organizations (PPOs) are the most flexible option, allowing you to choose whichever doctors, specialists, or facilities you want. You’ll still pay less when you use in-network providers, but you’ll usually still get coverage when seeing providers outside of that network — it’ll just cost more.^[2]

• High-deductible health plans (HDHPs) are plans with lower monthly premiums, but higher deductibles of at least $1,400 for individuals and $2,700 for families. They’re usually paired with a health savings account funded with tax-free money.

Read More: What is a PPO and How Does It Work?

Average cost of health insurance by plan type

The more coverage and flexibility you have with your health insurance plan, the more it’ll likely cost. This is true whether you buy a tiered plan through the healthcare marketplace or choose an employer-sponsored plan through your workplace.

Here’s a look at how much you might pay on average for your healthcare premiums, based on the plan type:

Average cost of health insurance by number of people covered

The more people a healthcare plan covers, the more that plan will cost. Many plans have two general categories: single coverage (one person) and family coverage (two or more). Here’s how the monthly cost differs:

Average cost of health insurance by ACA metal tier

If you’re buying healthcare coverage through the ACA healthcare marketplace, your plan pricing will also vary depending on the level of coverage you buy. These plan levels are called metal tiers, with each offering its own cost-share options and premiums. 

How can you decrease health insurance costs?

If you want to minimize your health insurance costs, here are a few things you can try:

• Purchase a high-deductible healthcare plan. Typically, the higher your deductible, the lower your premiums. Just be sure that you can afford the out-of-pocket deductible if and when you need care.

• Opt for an HMO. By choosing a plan that limits your healthcare provider options to a defined network, you can usually lower your premiums.

• Take advantage of employer-sponsored plans. If your workplace offers a health insurance plan, look into what it entails and how much it will cost. Employers often pay a portion of the premiums, so this coverage can cost less than a plan on the open market.

See More: Health Insurance Knowledge

Health insurance costs FAQs