Health Insurance

What is the Average Health Insurance Premium?

Health Insurance
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Written by Brandon

This is the question on the minds of most people who desire a health insurance plan. Well, look no further as you would get answers to all that you seek right here! But first I would like to fill you in on all you need to know about what premiums are, what a health Insurance is, and what a Health Insurance plan covers.

What is a Premium?

Premium simply put, is an amount you pay for a contract of insurance. It is also known as the monthly payment one makes to one’s health insurance company to stay enrolled in an insurance plan. It sometimes refers to a sum added to an ordinary charge, but for the benefit of better understanding, let’s go along with the second definition.

What is Health Insurance?

Health insurance is a kind of insurance that ensures total or partial coverage of the risk of a person accumulating medical expenses it is also defined by the Health Insurance Association of Nigeria as ‘coverage that provides for the payments of benefits as a result of sickness or injury’. Of course nobody ever prays or wishes for illness or injury but alas! It is unavoidable as long as one lives and is exposed to dangers all around. This is where the importance of health insurance is made vivid. It protects you from unexpected bills that arises as a result of emergency medical conditions.

It usually demands that the policyholder is responsible for a specified portion of the risk by paying upfront for medical costs up to a level which must have been agreed upon by both the insurance company and the would-be policy holder before the Health Insurance Company is responsible for payment.

Health Insurance usually covers preventive health services and watches out for potential health issues that could pop up as emergencies later on. Health Insurance also covers other important health benefits such as prescription drugs, maternity care, emergency services,etc.

What is a Health Insurance Plan?

Health Insurance Plans refers to the various platforms through which Health Insurance services are provided.

Under the Affordable Care Act, there are a set of 10 categories of services which Health Insurance Plans must cover. Amongst these plans include services like mental health services, inpatient and outpatient hospital care, prescription drugs coverage, doctors services, pregnancy and childbirth services and a few others. It should be noted that some plans cover more services but the above listed services must be among them.

There are a lot of factors that determine the price of health insurance premium.

You must first and foremost put into consideration, the federal and state laws regulating costs in your country of residence.

  • The plan you opt for. In this case, plans with higher premiums are PPO’s and platinum plans through Federal Health Insurance marketplace.
  • Your place of residence. This refers to your local areas or immediate environment. It is a determining factor because some plans are not available in certain areas, and most areas have only one plan. If you live in an area or county where more than one plan is made available, this  would increase competition and would in turn result in premium price reduction.
  • The rise in health costs could also affect premium price. Increase in the price of drugs for instance could result in increment in premium price.
  • Type of coverage. If you plan on getting your insurance as an individual, or getting family coverage, or you are getting an insurance through your employer, premium price will vary accordingly. This is considered the most important factor.
  • Premium prices also vary according to age. If you are younger, you tend to pay three times lesser that an older counterpart.
  • Tobacco usage. If you are a Tobacco user, premium can increase with 50%.

Having considered all these factors, the average premium prices according to the type of coverage which is the most important factor that determines premium price are stated below.

Premium Price for Individual Coverage

 Individual health insurance is a type of health insurance coverage that you buy for a single person You can purchase it through exchange or directly from the health insurance company.

The average health insurance cost for individual coverage is $440 per month. This information is in accordance to the data put together by eHealth.

Premium Price for Family Coverage

Family health insurance is a type of health insurance coverage for a family. The average cost for premium is 1,168dollars per month.

Premium Price for Employer Sponsored Health Insurance

 Employer sponsored health insurance is also referred to as group coverage. If you work for a big employer, premium cost might be on the high side. For a single worker, the average cost would be,1,242 dollars per month. While for family coverage with employer sponsored health insurance, an average premium would amount 6,015 dollars per month.

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