The cost of health insurance has been going up over the past decade. The way individuals shop for health insurance has changed with the introduction of the Affordable Care Act but families are still spending an average of 10% of their income on health insurance in 2015 compared to 6.5% in 2006.In 2016, an average family spent $18,142 on health insurance. This amount is likely to go up since an average increase of 25% is expected to happen in 2017.
There are different factors that affect how much an individual or a family will spend on health insurance premiums. The network associated with the coverage purchased is one of them. On average, HMO is the most affordable network with $230 a month while EPO is the most expensive network with $254 a month.
The AFA marketplace allows consumers to shop for health insurance policies in function of the level of coverage they need. Individuals can choose to purchase Catastrophic coverage for an average of $2,000 a year or opt for a Bronze plan that typically costs $2,411 in yearly premiums. Individuals who want more coverage can purchase a Silver plan ($2,961 a year), a Gold plan ($3,487 a year) or a Platinum plan ($4,360 a year).
Age is another important factor that influences health insurance premiums. One of the purposes of the Affordable Care Act was to reduce the number of factors that could affect the price of health insurance. However, older consumers still spend more on health insurance. A consumer in his or her twenties will pay $167 a month for catastrophic coverage and $363 a month for a Platinum plan. A 30 years old will pay 1.135 times more, a 40 years old will pay 1.3 times more and rates will be multiplied by 1.7 for a 50 years old. Rates are multiplied by 3 for individuals over the age of 64.
The average cost of health insurance also varies a lot from one state to another since consumers do not have access to the same options. Kansas is the most affordable place to buy health insurance with an average monthly premium of $196 while Wyoming ($366 a month) and Alaska ($426 a month) have the most expensive premiums. Arizona ($247 a month), Illinois ($244 a month), Michigan ($251 a month) and Nebraska ($243 a month) are more representative of the average cost of health insurance.
There are other expenses linked to medical needs since Platinum plans typically cover 90% of a person’s medical needs and the other plans offered on the marketplace cover a smaller percentage. A lot of individuals have to cover additional medical bills and prescriptions out of pocket.
These numbers are likely to keep going up since increases in health insurance rates have already been approved in a number of states. Most individuals are typically spending between $200 and $300 a month for their health insurance coverage and individuals will either have to end up spending more or opt for a smaller level of coverage.