Affordable Health Insurance For Adults - How much does health insurance cost? In the United States, Americans pay different premiums each month for health insurance. While these premiums aren't determined by gender or pre-existing health conditions thanks to the Affordable Care Act, a number of other factors affect how much you pay. We'll explore these factors below to help you understand how much you might be paying for health insurance and why.
Many factors that affect your health insurance coverage are out of your control. However, it is good that they are. Here are the top 10 factors that affect the cost of health insurance premiums.
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Employer-provided coverage contributes to several of the biggest factors that determine how much your coverage will cost and how much coverage it has. Let's take a closer look.
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If you work for a large company, health insurance can cost as much as a new car, according to the Kaiser Family Foundation's 2020 Employer Health Benefits Survey. Kaiser found that the average annual premium for family coverage in 2020 was $21,342, which is about the same as the manufacturer's suggested retail price of $22,715 for the 2022 Honda Civic.
Workers contributed an average of $5,588 in annual costs, meaning employers accounted for 73% of the premium. In 2020, the average premium per worker was $7,470. Of those workers, 1243 dollars or 17 percent were paid.
Kaiser covers health organizations (HMOs), PPOs, managed care plans (PPOs), and high-deductible health plans with savings options to meet average premiums (HDHP/SO). It found that PPO was the most popular type of plan, insuring 47% of covered workers. HDHP/SO covered 31% of insured workers.
Of course, all that money employers spend on health insurance for their employees leaves little money for wages and salaries. Thus, workers receive more premiums than these numbers. In fact, one reason wages haven't increased over the past two decades is because health care costs have skyrocketed.
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Additionally, because employees pay their health insurance premiums with pre-tax dollars, their burden may be lower than for people who purchase private insurance through the federal health insurance marketplace or their state health insurance exchange. (For the purposes of this article, "market" and "stock exchange" are synonymous.)
What type of plan employees choose affects premiums, deductibles, choices of health care providers and hospitals, and whether they can have a Health Savings Account (HSA) among many options.
For families where both spouses offer employer health insurance, careful comparison is important—one plan may be much better than the other. A partner whose plan is not used can pocket the portion of their pay that is not withheld for health insurance. Or couples without children decide to each choose a plan from a separate company as individuals (spousal coverage rarely includes discounts—it's basically double the individual rates).
HealthCare.gov's federal insurance plan marketplace, Obamacare, is alive and well in 2021, despite efforts by its political enemies to kill it. It offers plans from about 175 companies. 12 states and the District of Columbia have their own health exchanges that largely mirror the federal site, but focus on affordable plans for their residents. People in these areas are registered through their state, not the federal exchange.
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Each available plan offers four levels of coverage, each with its own pricing. From highest to lowest value, they are designated as platinum, gold, silver and bronze. A comparable plan is the second cheapest silver plan available through the health insurance exchange in a given area, and it may even vary by state where you live. It's called a benchmark plan because it's the plan the government uses to determine your premium subsidy, if any, against your income.
The good news is that prices are coming down a bit. The average premium for the second-cheapest silver plan on HealthCare.gov for a 27-year-old fell 4% from 2019 to 2020, according to the Centers for Medicare and Medicaid Services (CMS). Premiums for the second-cheapest silver plan for 27-year-olds fell by double-digit percentages in six states, including Delaware (20%), Nebraska (15%), North Dakota (15%), Montana (14%). , Oklahoma (14%) and Utah (10%).
And from 2020 to 2021, the second plan, the average cost of silver for a 27-year-old has decreased by 3%. Four states (Iowa, Maine, New Hampshire and Wyoming) saw premiums drop by 10% or more for the average rate plan.
The American Savings Plans Act of 2021 also established a special enrollment period (SEP) for marketplace plans from February 15 to July 31, 2021. During that time, the average monthly plan premium for new customers choosing plans through HealthCare.gov dropped 27%. , from $117 to $85 thanks to extensive subsidies. It also helped reduce out-of-pocket costs: deductibles dropped nearly 90% from $450 to $50.
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However, it's not all good news. For more information, read CMS' 2020 Health Insurance Exchange Premium Landscape Release. It shows premiums for 27-year-olds buying silver plans rose 10% or more in Indiana, Louisiana and New Jersey.
More importantly, these percentage changes show that they don't tell us anything about what people actually pay: "Some states with the largest reductions still have relatively high premiums, and vice versa," the brief said. "For example, while Nebraska's benchmark plan premiums dropped 15% from PY19 [2019 plan] to PY20, the average premium for a 27-year-old standard PY20 plan is $583. On the other hand, the average premium for a benchmark PY20 plan in Indiana is $13 % from PY19, the average PY20 standard plan premium for a 27-year-old is $314.
This trend will continue in 2021. For example, in the 2021 edition of the CMS Brief, while Wyoming's average premium for a comparable plan fell 10% from PY20 to PY21, the average premium for a comparable 27-year plan in PY21 was $648, the highest in the US. How many 27-year-olds can afford that kind of monthly premium? By contrast, New Hampshire's standard plan premium for a 27-year-old is the lowest in the nation at $273.
All of these numbers refer to only the 36 states whose residents buy plans through the federal HealthCare.gov exchange. Residents of California, Colorado, Connecticut, Idaho, Maryland, Massachusetts, Minnesota, Nevada, New Jersey, New York, Pennsylvania, Rhode Island, Vermont, Washington, and Washington, DC buy insurance through their state exchange.
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The good news is that most people who buy marketplace plans pay lower interest rates through what the government calls extended premium tax credits, known as subsidies. In 2019, 88% of people enrolled in HealthCare.gov were eligible for additional tax credits.
What are these subsidies? These are credits that the government applies to your health insurance premiums each month to make them more affordable. Basically, the government pays part of your premium directly to the health insurance company and you are responsible for the rest.
As part of the American Rescue Plan Act (ARPA), passed in March 2021, subsidies for low-income Americans were increased and extended to those with higher incomes. ARPA expanded market subsidies above 400% of the poverty level and increased subsidies for those making 100% and 400% of the poverty level.
You can claim advance tax credits in one of three ways: an equal amount each month; more in some months and less in others, useful if your income is irregular; or as a credit against your income tax liability when you file your annual tax return, which could mean you pay less tax or get a bigger refund. The tax credit is designed to make premiums available based on your household size and income.
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Your credit is based on your estimated income during the year, so if your income or household size changes during the year, it's a good idea to update your information on HealthCare.gov immediately to adjust your premium credits accordingly. . That way, you won't have any nasty surprises at tax time, and you won't pay higher premiums throughout the year.
In addition to premiums, anyone who has health insurance pays a deductible. This means that you pay 100% of your health care costs out of pocket until you pay a pre-determined amount. At this point the insurance coverage kicks in and you pay a percentage of your bill and the insurer gets the rest. Most workers are covered by the annual total cost, which means it covers most or all medical services. Here's how designs in general have changed in 2020:
Individuals eligible for cost-sharing reductions (a type of federal subsidy that helps reduce out-of-pocket costs for health care, such as copays and copayments) are responsible for deductions of less than $115 per household income up to the federal limit. poverty level.
If you miss your annual enrollment period and one of the reasons that qualifies you for aSEP is not one, you may want to consider purchasing a short-term health insurance plan that lasts from three months to 364 days. . Because these plans are an average of 54% cheaper than exchange plans, according to the Kaiser Family Foundation, you might as well make the decision.
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