Health insurance is a crucial asset to have on your side, especially as the cost of medical care continues to rise. For many people, a catastrophic medical event could end up costing tens of thousands of dollars or more, and the result could be financial ruin. With health insurance coverage in place, many medical care costs can be covered and a financial emergency can be averted.
The cost of health insurance in the United States varies widely depending on a variety of factors. Even plans offered by the same provider may differ in terms of cost and coverage. Below are just a few of the factors that contribute to the overall cost of health insurance in the United States:
Age can factor into the cost of health insurance because older people tend to require more frequent medical care. Even if you are in good health, a private insurance provider is likely going to charge more for policies issued to older Americans. Even with this being the case, the Affordable Care Act (ACA) removes the ability of insurers to place a lifetime limit on expenses. Additionally, there are out-of-pocket maximums for ACA Marketplace plans that cap costs; however, this amount is subject to change annually.
Believe it or not, your location can also affect the cost of your health insurance. Different states have different regulations that apply to health insurance providers, and these can sometimes raise or lower costs. Additionally, medical care costs in different states can change the amount you pay for health insurance.
Someone who is in a large urban area in one state may pay more for health insurance compared to someone in a rural area in another states simply because the cost of care in an urban area is likely going to be higher. The amount of competition among providers in a given area may also play into the cost of health insurance, so an area with a dense population and many providers, conversely, could have lower premiums.
The Amount of Coverage
Of course, one of the biggest factors in determining the cost of your health insurance is the amount of coverage your plan provides. Health insurance plans are available to cover everything from doctor visits to open-heart surgery, but the more coverage you have, the more you’re likely to pay in premiums.
Something else to consider is that health insurance plans usually come with a deductible in addition to premiums. The premium payment is the monthly or yearly payment you make to carry the coverage, and the deductible is the amount of medical care in dollars that you will need to incur before your benefits begin to apply. In most cases, you are responsible for the full dollar amount of medical costs up until your care costs have reached the deductible threshold.
The Amount of Care
Finally, the amount of care or frequency of care each individual needs can change the cost of health insurance since more complex and frequent care necessitates more costs. If someone has a chronic condition that requires monthly treatment by a specialist, that person is likely going to end up spending more in copays or coinsurance costs compared to someone who only sees their doctor once per year for a wellness checkup.
The Average Cost of Health Insurance in the United States
Although there are a number of variables in determining the cost of health insurance, and may vary based on the number of dependents covered by your insurance plan. Many family plans also cost more as more family members are added to the plan, so a larger family could pay more than a smaller family.