The Affordable Care Act (ACA) has made health insurance more accessible to Americans by creating the health insurance marketplace.

In addition, the ACA prevents insurance companies from denying coverage due to pre-existing conditions and mandates health insurance subsidies for low-income families and individuals. 

Because of these government-instituted policies, over 90% of Americans now have health care coverage, bringing a tremendous sense of relief to many families that may have gone without coverage previously.

In this article, I will explain what health insurance is and how it works for you and your family.

I will also review the different tiers of pricing based on the type of insurance you choose and other factors that affect your cost.

Finally, I’ll discuss the various health insurance options available, which come under the ACA guidelines. 

What Is Health Insurance?

Health insurance is a contract between you, the enrollee, and your health insurance provider that ensures that they’ll cover your medical bills—usually with certain exceptions and restrictions.

These include, among other things, copays, coinsurance, out-of-network doctors you may visit, and deductibles.

Individual Health Insurance Cost

Individual health insurance plans are available through either a government exchange or marketplace or private insurers and licensed brokers for those who don’t have employer-sponsored health insurance options. 

The cost of individual health plans will vary, depending on the level of insurance you choose — also known as “metals.”

Individual plans, often purchased by self-employed people, will appear to be more expensive than employer group plans, but that’s because most employers pay a percentage of their employees’ health insurance premiums.

Otherwise, the costs for the same plans are generally the same.

Deductibles and Out-Of-Pocket Max

The deductible amount is what you have to spend for healthcare services and prescriptions covered under your plan before your insurance company pays anything.

However, free preventive services are exempt from the deductible amount and will be covered. 

The out-of-pocket max refers to the amount you’ll have to spend before your insurance plan covers 100% of your expenses, less your coinsurance amount. 

Generally, the higher your monthly premiums, the lower your deductible and out-of-pocket costs will be. 

Estimating Your Yearly Costs

While the average cost for an individual’s deductible in 2020 was $4,364 and a family’s deductible was a whopping $8,439, these numbers vary significantly from plan to plan, and these costs must be estimated appropriately by you when you purchase a health insurance policy. 

If your family depends on a substantial amount of health care each year, you may want to opt for a plan with a higher monthly premium and lower deductibles instead of a lower-cost plan that may not offer coverage that works for you. 

Health Insurance Tiers and Costs

Insurance plans are given a metal category to help consumers understand what they’ll get with their plan from whichever insurance company they or their employer choose to be their provider.

The metal categories are the same no matter which insurer you opt to use for your coverage.

Any health plan that is ACA approved is required to cover the ten following things: 

• Hospitalizations
• Outpatient (ambulatory) care 
• Preventive care
• Emergency services
• Pediatric care, including vision and dental
• Lab tests, including blood tests and other screenings
• Maternity and child services
• Physical rehabilitation services
• Mental health treatment 
• Prescription drugs

Insurers determine how these benefits are provided, and some insurers will add other benefits to their plans.

The costs for the plans listed below are the national averages for 2021.

Actual costs will vary by state, insurer, and your employer’s contribution.

Costs are based on the expenses after you’ve met your deductible.

Bronze

Bronze is the best option for those interested in protecting themselves from very high healthcare expenses.

It will be best for people with few prescriptions, medical issues, and who rarely see a medical professional.

• Highest out of pocket and lowest premium
• Cost per month: $448 for an individual, $1,041 for a family
• You pay 40% of medical expenses, and insurance pays 60%

Silver

Choose silver if you qualify for cost-sharing reduction (CSR).

Silver will save you money on out-of-pocket costs compared to a bronze plan.

• High out of pocket costs
• Cost per month: $483 for an individual, $1,212 for a family
• You pay 40% of medical expenses, and insurance pays 60%

Gold

If you or a family member has extensive medical care needs or takes multiple prescription medications, a gold plan is your best option.

You’ll pay more for your coverage each month, but you’ll have much fewer out-of-pocket expenses than with either the bronze or silver plan. 

• Low out of pocket costs and high premium
• Cost per month: $569 for an individual, $1537 for a family
• You pay 20% of medical expenses, and insurance pays 80%

Platinum

A platinum plan eliminates nearly all out-of-pocket expenses — at a high monthly cost.

This plan is a step up from the gold plan and applies to the same type of consumer — someone with many medical care expenses. 

• Lowest out of pocket costs and the highest premium
• Cost per month: $732 for an individual, $1,610 for a family
• You pay 10% of medical expenses, and insurance pays 90%

Factors That Affect Health Insurance Cost

The following are factors that can possibly affect your health insurance cost.

Coinsurance

Coinsurance is the amount you pay for your medical care once you’ve met your deductible. 

Copayment

Your copayment is what your insurer contracted you to pay to each provider on your plan, as well as the amount you’ll pay for prescriptions.

Your copayment doesn’t go towards meeting your deductible.

Deductible

The deductible is the dollar amount you need to spend on healthcare before your insurance benefits kick in.

Your deductible will be lower if your premium is higher, and vice versa.

Out of pocket max

The out-of-pocket max is the most you’ll spend beyond your copays and premiums before your insurance will cover 100% of your expenses.

Your deductible counts towards this number. 

The average out-of-pocket max for a person with insurance through their employer for 2021 was $4,039.

Gender

Due to the ACA, people with vaginas can no longer be charged more for health insurance than people with penises.

Marital status

Your marital status does not affect your health insurance rates.

Still, married people should look into whether or not it’s financially beneficial to have separate health insurance policies — for example, if your employers both offer coverage for individuals that is lower than a family plan at either company.

Individual plans for two people are often much less costly than a family plan for more than two adults.

Other Health Insurance Options

Other health insurance options you might want to opt for include:

Private health insurance

If you’re self-employed or your employer doesn’t offer health insurance benefits, you can find private health insurance through a licensed broker.

All health care plans must conform to ACA guidelines, so any option you choose will cover the ten required items discussed earlier.

One benefit of getting a private health insurance plan is that you can sign up anytime, unlike the marketplace, which has specific dates for open enrollment.

Employer-based health insurance

Most large companies offer health insurance benefits to their employees, which can add up to many savings for families.

Smaller companies sometimes find it difficult to provide benefits as rewarding as bigger ones, but most will have some health insurance benefits.

When you are looking for a job or in the interview process, make sure to check with your prospective employer to verify they offer health insurance benefits, especially if you have children. 

COBRA

According to the Department of Labor, COBRA generally requires that employers with 20 or more employees offer employees and their families the opportunity to extend health coverage (called continuation coverage) for a limited period of time.

The company is not required to continue to pay any amount towards the insurance, and the ex-employee must cover the expense.

Group health insurance

Some organizations offer health insurance coverage for their members who cannot get group health insurance through their employer.

For example, the Freelancers Union provides health insurance for its members, as does AARP.

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