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How much does Individual Health Insurance cost?

The cost of health insurance plans can vary greatly depending on a variety of factors, including plan type, household size, income, age, and more. But most important to note is the fact that plan cost will vary depending on method (individual health insurance, traditional group, etc.). So today, I’ll walk through the cost of individual health insurance

How much does individual health insurance cost?

In 2021, the average annual cost for an individual health insurance plan on the Health Insurance Marketplace was $5,424.This is for a single-coverage plan—not a family plan. In comparison, the average annual cost for traditional group health insurance (or employer-sponsored health insurance) in 2021 was $7,739. 

Monthly premium payments alone calculated the above costs. Let’s call these premium costs

Premium Cost – the cost of a health insurance plan from monthly premium payments

So given these numbers, the premium cost of individual health insurance is significantly lower on average than traditional group insurance. 

But why stop there?

What determines total cost?

Next we should consider something known as total cost. Beyond premium cost, most people accrue other expenses throughout the year in the form of medical bills that count toward reaching a deductible and/or copayments at doctor visits. These other expenses combined with the monthly premium can be called total cost.

Total Cost – the total cost of a health insurance plan, comprised of monthly premium payments and beyond. This includes medical bills that count toward a yearly deductible and out-of-pocket expenses.

In general, a person’s total cost for health insurance will be determined by their type of health insurance plan, personal health condition, level of medical care required, frequency of office visits, and more. It’s extremely important to have a health insurance plan that fits your unique needs!

Individual health insurance plans are the perfect solution for this! Some health plans on the Marketplace are best suited for people with a high level of need. And other plans are best for those that require very little medical care!

Conversely, traditional group health insurance plans available through many employers typically follow a one-size-fits-all approach. In this method, the employer offers its employees different levels of coverage for only one type of health insurance plan. In a future blog, I’ll do a detailed comparison of traditional group versus individual health insurance and the levels of coverage available.

So in terms of total cost, the cost of individual health insurance will be best aligned to a person’s unique needs.

Lowering the cost of individual health insurance.

With traditional group health insurance, the employer pays for a portion of the cost of the plan for the employees. In comparison, government-sponsored discounts can lower the cost of individual health insurance!

Previously, I covered individual health insurance eligibility and the discounts associated with individual plans. These discounts—known as Advanced Premium Tax Credits—are available to nearly 80% of individuals. And they can even lower a person’s premium cost down to $0 when applicable.  

Curious about how this works? Check back in on my next blog where I’ll answer the question “What are Advanced Premium Tax Credits?” Thanks for taking the time to learn with me today!

Important Notice: Remodel Health does not intend to provide specific insurance, legal, or tax advice. Remodel Health always recommends consulting with your own professional representation to properly evaluate the information presented and its appropriate application to your particular situation.