How much does Health Insurance Cost for a Family?

Protecting your family from illness and disease is essential, but so is protecting yourself from unexpected healthcare costs. And whether you’re shopping around for a large family or a small one, most people live on a budget. So, it’s important that you have a good understanding of how much health insurance costs for a family before you start shopping around for a plan.

Below we’ll discuss everything you need to know about health insurance costs for a family and all of the factors that influence the premiums. 

How much does private health insurance for a family cost?

Health insurance is a significant expense for families. In many cases, it’s the single biggest expense a family has. On average, health insurance costs for a family range from $800 to $1,200 per month. Those premiums can increase or decrease depending on the plan and where you live.

However, understanding how much health insurance costs for a family is key to avoiding surprise bills and finding the best deal. In this section, we’ll discuss the factors that influence health insurance costs, including the different types of coverage, the role of health care costs in premiums, and more. We’ll also provide you with a general overview of health insurance costs for a family, so you have a better idea of where to start when shopping around.

Private Health Insurance Cost Considerations

Private health insurance is sold directly from agents, brokers, and insurance companies, often through online portals. These private plans are not sold directly through the exchange and are structured a bit differently. Some differences include: 

1. Private health insurance plans are not eligible for subsidies or financial assistance. 
2. They are considered major medical plans, so they offer the same benefits as plans sold through the marketplace. 
3. These plans are available for purchase online or directly from an insurance company or broker. It’s important to note that you are not responsible for any commissions paid, as these are covered by the health carrier. So, they should not affect your final bill. 
4. Provider networks tend to be broader since the insurance carrier is not responsible for paying any administrative fees for private, off-exchange plans. 

While private plans sound like a great way to avoid the government marketplace, it’s important to know that these policies are generally underwritten. This means the underwriter must check your past medical history where they look for any pre-existing conditions and expensive medications that you are prescribed.

The good news is that if you are accepted for a private plan, you will pay less and have access to better coverage because they want you to stay on the plan forever. 

We should also mention that there are many types of off-exchange plans, such as critical illness plans, indemnity plans, and short-term plans. These plans feature some of the lowest premiums and can be an excellent fit for healthy individuals. Just keep in mind that these are not qualified health plans, so they do not meet the requirements set forth by the Affordable Care Act. 

One of the biggest draws for private health insurance plans is that they feature more extensive networks, which is great for anyone who requires special care. For example, government plans that carry subsidies may save you money monthly, but if you need care from a physician or facility that’s not covered, you will spend more money out of pocket. 

Marketplace Health Insurance Cost Considerations

Every person not receiving insurance coverage from their employer can shop in the government marketplace for plans. At Healthcare.gov, you’ll find that premiums are usually higher, but they cover every pre-existing condition. The plans offered on the government exchange are also called on-exchange policies and feature some unique characteristics, including: 

1. Marketplace insurance allows citizens to apply for a tax subsidy, where if they qualify, a portion of their health insurance plan will be covered by financial aid. However, your financial situation must fall between 100 and 400 percent of the federal poverty level. 
2. Every health insurance policy purchased through Healthcare.gov includes essential health benefits, which are now also required by law for every major medical health plan. These services include: 
   1. Ambulatory patient services
   2. Hospitalization
   3. Emergency Services
   4. Prescription medications
   5. Substance use disorders and mental health issues
   6. Laboratory services
   7. Maternity and newborn care
   8. Wellness and preventative care
   9. Rehabilitative services
   10. Pediatric services, including dental and vision
3. Some on-exchange health plans offer smaller provider networks, as this is one of the primary ways that insurance carriers keep the monthly rates lower. Hence, it’s critical that you ensure there’s a doctor and hospital in your area that’s part of the network you’re considering. 

The only drawback of marketplace health insurance plans is that you can only buy new policies during open enrollment periods. The only way around this is if you are eligible for a special enrollment period, so it’s best to check Healthcare.gov to see when open enrollment is taking place or if you qualify for a special enrollment period.

What is the cost of health insurance?

The cost of a family’s health insurance will vary based on several factors. For example, private carriers will check into your complete medical history and may not even accept you if there are major pre-existing conditions. Yet, if you are accepted, the average family of four will pay roughly $1,500 per month on a private health insurance plan. 

Alternatively, the government marketplace does not turn away anyone with pre-existing conditions and only takes five factors into pricing considerations. These factors are: 

1. Age
2. Location
3. Tobacco use
4. Individual or family
5. Plan category

The health insurance cost for a family of 4 via the marketplace can range anywhere from $0 (if you qualify for a high enough subsidy) up to about $25,000 per year. So, as you can see, it’s hard to estimate the cost of health insurance for a family. However, a good rule of thumb is that coverage for a family of four should cost about $1,400 per month.