What Is the Average Health Insurance Premium?

The changing cost of healthcare in the U.S.

Female doctor talking with patient
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U.S. healthcare spending grew annually at 9.7% in 2020, reaching a record $4.1 trillion, or $12,530 per person. As a share of the nation's gross domestic product (GDP), health spending accounted for 19.7%. These numbers are staggering. What are Americans getting for their money? 

Learn more about the factors impacting the cost of healthcare in the U.S. and the changes over recent years.

Key Takeaways

  • In 2021, the average monthly premium across all types of U.S. health plans was just under $500.
  • Premiums will vary by factors such as age, location, and plan type.
  • The average family of four in the U.S. spent $25,011 on healthcare in 2020, including both premiums and deductibles.
  • Total healthcare spending is projected to hit $6 trillion by 2027.

Healthcare Costs Based on Age and State

Healthcare costs vary based on your age and the state you live in. As you might expect, younger, healthier adults pay the least for healthcare coverage, but even for younger adults, the cost of coverage varies greatly based on location.

In 2021, the average cost of a monthly health insurance premium in the U.S. is $541 per month. The average annual deductible is $5,940. In some places, the cost varies greatly from the national average. In West Virginia, the average premium is $831 with a deductible of $8,540; in next-door Maryland, the average is only $344 with a $4,122 deductible.

Age is another big factor when it comes to the costs of health insurance. Take a look at this breakdown by age for the average monthly healthcare premium without subsidies:

  • 18 and under: $224
  • 18-24 years: $267
  • 25-34 years: $318
  • 35-44 years: $391
  • 45-54 years: $529
  • 55-64 years: $771

The Costs of Individual vs. Family Plans

The Affordable Care Act offers some subsidies to make health insurance more affordable, but not everyone qualifies.

In 2021, health insurance premiums for unsubsidized individual customers were $645 per month on average, while family premiums averaged $1,852 per month. The average individual deductible is individuals was $4,490; the family deductible averaged $8,620.

Over the course of a year, the average health spending for a family of four in the U.S. was $22,221 in 2021. This figure includes spending on monthly premiums. It also includes meeting the deductible.

How Premium Costs Have Changed in Recent Years

In recent years, healthcare costs have kept rising for both individuals and families in the U.S. This is also true for monthly and annual insurance premiums. The average yearly premium for a family has increased by more than 25% since 2015, and it's increased by over 60% since 2010.

Healthcare spending in the U.S. grows each year. Projections estimate yearly annual spending of nearly $6 trillion by 2027, 50% increase compared to the $4.1 trillion spent in 2020.

Understanding Tiered Coverage

Some healthcare providers offer tiered coverage in an effort to allow customers to choose a plan that fits both their medical needs and their budget.

A basic benefits package will have higher deductibles and co-pays, but it will go for a much cheaper monthly premium. On the other hand, the higher-tiered plans with low deductibles and little or no out-of-pocket expenses may be out of reach for many people. Even basic healthcare coverage with higher deductibles and co-pays is better than the alternative—no healthcare coverage at all.

Here are some statistics for average individual monthly health insurance premiums paid in 2020 based on tiered-plan choice:

  • Catastrophic: $195. This insurance covers essential healthcare benefits only.
  • Bronze: $448. A bronze plan has low monthly payments for basic healthcare benefits. You'll have a higher deductible.
  • Silver: $483. A silver plan offers more coverage at a higher monthly premium but with a lower deductible.
  • Gold: $291. A gold plan offers comprehensive healthcare coverage with higher monthly premiums and low out-of-pocket expenses.
  • Platinum: $363. The platinum plan offers the most comprehensive health care benefits package with the highest monthly premium of all plans. You'll pay little to no out-of-pocket expenses.

Tips for Finding Healthcare Coverage

With the rising costs of healthcare, how can Americans save on healthcare and the cost of insurance? Be diligent, and do your research to compare plans. That way, you can get the most comprehensive health coverage you can afford.

If your employer offers health insurance and pays for a large portion of the premium, it is a great option to think about. If not, shop the health insurance exchange for affordable coverage. Check to see whether you qualify for any subsidies to help offset the cost of health insurance. Health savings accounts can also help you pay for out-of-pocket expenses such as co-pays and deductibles.

Finally, if you have a catastrophic accident or illness, ask the hospital for help with a payment plan. Many hospitals will reduce their charges for those who are unable to obtain insurance.

Frequently Asked Questions (FAQs)

What is a health insurance premium?

A health insurance premium is an amount you pay each month for coverage. This payment keeps your coverage active.

What are other health insurance costs besides the premium?

In addition to an insurance premium, you may have to pay costs such as a deductible, copayment, or coinsurance. These are costs that you share with the health insurance company. Some preventative care, such as screenings, immunizations, or annual appointments with your doctor, may be offered at no additional cost for you to pay.

What are premium tax credits for health insurance?

The premium tax credit is a credit on your federal taxes that can help lower the cost of insurance you buy through the health insurance Marketplace. This is a refundable credit, so if it is greater than the amount of tax that you owe, you'll get the difference as a credit toward your taxes or a refund from the IRS.

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Sources
The Balance uses only high-quality sources, including peer-reviewed studies, to support the facts within our articles. Read our editorial process to learn more about how we fact-check and keep our content accurate, reliable, and trustworthy.
  1. CMS.gov. "National Health Expenditure Data, Historical."

  2. Value Penguin. "Average Cost of Health Insurance (2021)."

  3. eHealthInsurance.com. "ACA Index Report on Unsubsidized Consumers in the 2021 Open Enrollment Period."

  4. Kaiser Family Foundation. "Employer Health Benefits Survey."

  5. CMS.gov. "National Health Expenditure Projections, 2018-2027."

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