How Much Health Insurance Costs

Health insurance costs are important to many people because, after all, you have to fit it in your budget. Unfortunately, I can’t give you a clear dollar amount due to the range of plans — and therefore, prices — offered. Here is what I can tell you.

Insurance costs vary.

Costs are determined by your current health, age and income. If you are young and healthy, you will pay less than someone who is middle aged and has some health issues.

Check the premium costs vs. out-of-pocket costs.

It is important to not only look at the cost of the insurance premiums each month but also the overall costs of care. A $250 per month premium may sound expensive; it totals $3,000 per year. However, if you get sick or break a bone, your out-of-pocket costs associated with the plan or cash fees and penalties for not having insurance could exceed $3,000 cost with one hospital visit.

Compare prices.

The Affordable Care Act made it possible to compare the costs of the various health insurance plans being offered. Prior to the health exchanges, there was no easy way to know what the insurance plans cost and what was included. You had to be a PhD in healthcare in order to compare the various plans. Now, all the plans have to include the same basic services, and the prices for the various plans are listed on the health exchange.

Although, I can’t quote you an exact dollar amount, this information should make it easier for you to assess insurance costs to determine which plan is right for you and your family.


Trying to figure out health insurance? Get my book Choose Your Best Health Insurance for detailed assistance on how to decide which insurance plan is right for you and your family.

Why Isn’t My Insurance Covering Anything?

Pharmacist Showing Product To ClientI often receive questions from people who say they went to the doctor but their visit wasn’t paid for by their insurance, or their prescriptions weren’t covered. These people want to know why they are paying for health insurance if it isn’t going to cover anything.

In most cases, the answer is that they haven’t yet met their deductible. Many plans cover doctor’s visits and prescriptions, but only after the patient has paid first. If your plan has a deductible, it means that you will pay out-of-pocket for expenses up to that amount, and then insurance will kick in.

So let’s say, for example, that you have a $250 deductible with your insurance plan. You may have to pay out-of-pocket for doctor’s visits or copays until your total expenses reach $250. To be clear, that doesn’t mean $250 per instance. You may pay $60 for a prescription in January, $30 for another in February, and so on. All of those expenses get totaled—in this example you are up to $90. Once you have paid a total of $250, your insurance will kick in and cover your expenses for the rest of the year.

These costs usually reset at the beginning of the year. Hello, January. Early in the year, you may be paying out-of-pocket, but as the year goes on and you meet your deductible, your insurance may start paying on your behalf.

As you budget for the year, you may want to keep these expenses in mind. In fact, you may want to set aside some extra money each month toward the end of the year to cover your out-of-pocket costs at the beginning of the next year. You may also consider opening a flexible spending account (FSA) or health savings account (HSA) in the future to help cover your out-of-pocket costs.