Average Cost of Private Health Insurance in the USA


Average Cost of Private Health Insurance in the USA thumbnail

According to the Kaiser Family Foundation, the average cost of health insurance premiums for a family was $13,375 in 2009. The average cost of a single health insurance premium in 2009 was $4,824. Patients with health insurance provided by their employers typically don’t pay the entire cost themselves. For family insurance plans in 2009, workers paid an average of $3,515 of the cost. For single plans, employees paid an average of $779. People who buy their own insurance see lower premiums—though they typically don’t have an employer contributing—and higher out-of-pocket costs, according to second survey by the Kaiser Family Foundation of 1,038 people conducted in 2010. According to the survey, the average cost for a single-coverage insurance premium was $3,606. For family premiums, the average cost was $7,102.

Factors

    Insurance plans that impart more costs on patients in the form of higher deductibles and higher co-payments typically have lower premiums. A deductible is the amount of money a patient pays before insurance coverage begins. The Congressional Budget Office assumes that for every 10 percent decrease in a patient’s out-of-pocket costs, health care spending rises between 1 to 2 percent. According to an analysis of Kaiser Family Foundation data from 2009 by USA Today, “40 percent of small-business employees enrolled in individual health plans pay annual deductibles of $1,000 or more. That’s almost twice the number who paid that much in 2007.”

History

    The rising cost of health insurance premiums in the USA have become a significant political issue in the United States. According to the Kaiser Family Foundation, the average cost of health insurance premiums for a family rose from $5,791 in 1999 to $13,375 in 2009. The average cost of a single health insurance premium in 2009 was $4,824 up from $2,196 in 1999. Most Americans receive their health insurance through their employer, which pays a portion of the cost.

Types

    Average health insurance premiums vary according to the type of insurance one has. People with a high-deductible plans in 2008 saw significantly lower costs than people with an HMO, or Health Maintenance Organization, plan, about $11,000 per year for family coverage on a high-deductible plan, compared with $13,370 for family premiums under a PPO plan. PPO plans tended to have the highest average cost. Patients on a PPO plan are restricted in their choice of providers, but do not need a physician to act as a gate keeper. Hence, they can see a specialist without a referral. The average family premium for a Point of Service plan, where a doctor acts as a “gatekeeper” for services was $13,075 for a family. HMOs, where a patient’s choice of providers, and sometimes services, are strictly managed, averaged family premiums of $13,470 in 2008.

Geography

    Insurance costs vary from state to state. In 2008, the average single health insurance premium in Alaska cost $5,293. The lowest average single health insurance premiums could be found in North Dakota, where they cost $3,830. For family coverage in Iowa in 2008, the average premium cost $10,947. In Massachusetts, it was $13,788.

Considerations

    Data suggest that shopping around can yield significant savings. A 2008 study of health insurance premiums found that half of single insurance premiums cost between $3,500 and $5,100. One-fourth of policies cost more, and the rest cost less. For family policies, half of them cost between $9,800 and $15,000. Again, one-forth cost more and the rest cost less. Ten percent of single health insurance premiums cost more than $6,200. Ten percent of family premiums cost more than $17,000.

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