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How Much Does Health Insurance Cost?

health insurance cost

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Matthew Collister
Updated June 19, 2022
5 Min Read

For many Americans, health insurance is a major expense. According to an annual study by the Kaiser Family Foundation (KFF), the average individual health insurance premium for 2022 coverage purchased through state and federal exchanges is $438 per month or $5,256 per year. Premiums range from $309 per month in New Hampshire to $762 in Wyoming.

Healthcare spending and health insurance in the U.S.

While expensive, health insurance can help people mitigate even bigger expenses. The Centers for Medicare & Medicaid Services states that U.S. healthcare spending in 2020 was $4.1 trillion. That breaks down to $12,530 per person. Health insurance covered about 68% of those costs.

Most of us are fortunate enough to have some form of health insurance. KFF notes that approximately 50% of Americans have group insurance coverage through an employer. The employer often pays for at least part of that premium. Another 35% receive health insurance from government programs such as Medicare and Medicaid, or through the U.S. military. 

Finally, approximately 6% of Americans are individually insured. They purchase health insurance directly from an insurer, through an agent or broker, or through a healthcare exchange.

How does health insurance work?

If you need to shop for insurance, chances are you’ll use an online exchange hosted by the federal government or your state (18 states have their own health insurance exchanges as of 2022). These exchanges are shopping portals where you can easily check multiple insurance companies to find a plan with the lowest premium. Companies that sell through the federal exchange must provide multiple plan options covering 10 essential healthcare benefits. This means you can be confident the coverage you’re buying meets your needs. 

In return for paying the premium, the insurer will pay for part of the cost of your healthcare services according to the terms of the insurance plan’s contract. The insurer must also comply with laws specifying what health services must be covered. 

Your insurance plan will likely also require you to pay for a portion of your health care costs. This payment may be in the form of coinsurance, copays, and your policy’s deductible. But with insurance, your total cost of health care should be much lower than if you pay for your medical services completely out of pocket.

What factors affect health insurance premiums?

Premiums for insurance plans purchased through the federal exchange vary based on five factors:

  • Your age: Premiums can be three times higher for older Americans.
  • Your state: Differences in laws, cost of living, and the insurance market in each state can affect your premium.
  • Whether you use tobacco: You may be charged 50% more if you’re a smoker or use other forms of tobacco.
  • Individual vs. family enrollment: Expect to be charged more for a plan covering your spouse and children.
  • Metal tier: Plans purchased through the federal exchange are offered with a choice of four metal tiers of coverage: Bronze, Silver, Gold, and Platinum. With each succeeding tier you pay more in premium, but you pay less in co-pays when you need care.

When you buy health insurance through a government exchange, you may be eligible for tax credits or cost-sharing reductions (government subsidies). These can help bring down your total cost. You’ll find out if you’re eligible when applying for coverage.

What is the average health insurance premium by state?

According to an annual study by KFF, monthly average premiums for an individual buying health insurance through the federal or a state exchange are as follows:

StateMonthly averageStateMonthly average
New Hampshire
New Jersey
New Mexico
New York
North Carolina
North Dakota
Rhode Island
South Carolina
South Dakota
West Virginia

National average: $438

KFF states that these monthly averages are based on the second-lowest-cost silver-tier premium for a 40-year-old.

As you can see, where you live makes a difference in what you pay for health insurance. Much of the variance is based on each state's insurance and healthcare marketplace. Factors such as the number of competing insurers, whether a state has expanded its Medicaid program, and the degree to which hospitals have consolidated within a state all play a role in insurance premiums. 

What is the average health insurance premium by metal tier?

As explained above, metal tier is one factor that affects health insurance premiums for plans bought through a government-run exchange. 

The tiers represent a trade-off for you as an insurance buyer and healthcare consumer. They allow you either pay less in premium and more in out-of-pocket costs (copayments and coinsurance) when you need care, or pay more in premium and less out-of-pocket for care.

KFF benchmarks the average policy premium by metal tiers from bronze through gold. As you can see, the monthly premium can vary significantly depending on which tier you choose.

TierKFF national average monthly premiumHow your costs for care are split
You pay 40% Insurer pays 60%
You pay 30% Insurer pays 70%
You pay 20% Insurer pays 80%
You pay 10% Insurer pays 90%

For this benchmark, KFF looks at the lowest average premium for each tier for a 40-year-old. KFF does not publish an average premium for the Platinum tier. 

Tips to help you find the right health insurance

The bottom line? When choosing a metal tier, consider your likely healthcare needs and costs to make an informed choice. Here are a few additional tips to follow when choosing a plan.

  1. Do your homework.

The health insurance market in the U.S. can be downright confusing. Take some time to research your options before you start shopping in earnest for a plan. 

  1. Understand the lingo.

Part of the confusion when shopping for health insurance (or any type of insurance, for that matter) is the terminology. To help, we’ve defined a few health insurance terms related to this article in the glossary below. Here’s an even more extensive list of health insurance terms.

  1. Don’t miss the deadlines.

You can buy most types of insurance whenever you need it. But buying health insurance means taking action during an “open-enrollment period.” The standard open-enrollment period for policies purchased through the federal exchange is November 1 through January 15. This is for policies that go into effect in January. However, some states have different dates, so be sure to check well in advance. 

You may be able to get health insurance outside of the open-enrollment period in certain situations. An example is if you lose employer-provided coverage and need to apply for an individual plan. Those who qualify for Medicaid or CHIP can also apply year-round.

  1. Take advantage of free support

Just because you’re shopping for health insurance as an individual doesn’t mean you have to go it alone. Consider contacting a licensed insurance agent or broker who specializes in healthcare insurance. If using the federal government's health insurance exchange, you can work with a local “assister.” can help you find an agent, broker, or assister near you. 

A necessary expense

Health insurance is a significant, albeit necessary, expense. While your actual premium may vary significantly from your state’s average, having these numbers handy can provide at least a general idea of what you can expect to pay. 

Glossary of terms

Affordable Care Act (ACA)

The Affordable Care Act (ACA) is a federal law enacted in March 2010. This comprehensive legislation was designed to expand the availability of affordable health insurance to more Americans, among other things. It’s had a profound effect on the health insurance market, including the development of online exchanges where individuals can get coverage. 

Often referred to as “Obamacare,” (a reference to the U.S. president who signed the legislation) the ACA has come under fire several times. However, as of 2022, its key provisions have withstood action by the U.S. Congress and review by the U.S. Supreme Court.


A fixed amount of money you pay for a healthcare service, as outlined in your health insurance policy contract. Co-pays usually apply after you’ve paid your policy’s deductible. 

Metal tiers

The four levels of coverage available with health insurance policies purchased through a government-run exchange. Each tier — Bronze, Silver, Gold, and Platinum — specifies how much the insurance company pays for services and how much you pay for services. You pay less for services in each successive tier, but you pay more in policy premium.

Open enrollment period

A period of time when you can purchase health insurance. Open enrollment for 2023 plans purchased through a government exchange in most states is from November 1, 2022, through January 15, 2023.


The amount of money that you pay to the insurance company. In exchange for receiving the premium, the insurance company agrees to provide coverage according to the plan’s contract.

Ten (10) essential benefits

Healthcare services that every policy sold through a government exchange must cover. These include the following:

  1. Ambulatory patient services 
  2. Emergency services
  3. Hospitalization
  4. Pregnancy, maternity, and newborn care 
  5. Mental health and substance use disorder services, including behavioral health treatment (including counseling and psychotherapy)
  6. Prescription drugs
  7. Rehabilitative and habilitative services and devices 
  8. Laboratory services
  9. Preventive and wellness services and chronic disease management
  10. Pediatric services, including oral and vision care