When it comes to providing for your loved ones, family health insurance is likely to be one of your priorities. You can protect your family health and your budget from the hazards of unexpected medical care and its associated expenses– which can easily run into thousands of dollars– by having health insurance.
The cost of family health insurance varies depending on factors such as plan type. level of coverage, number of dependents, whether you smoke, and where you live. You can start with the average family health insurance cost and then determine your options for controlling or reducing this cost.
How much is family health insurance?
In 2022, the average monthly premium cost of the popular Silver plan for a 40-year-old couple is $1,052. A 40-year-old couple with one young child would pay an average of $1,362 per month for a Silver plan, and a family of five would pay around $1,9831 per month.
These figures, reported by Forbes Advisors, are based on national average premiums of health insurance plans on the federal marketplace, Healthcare.gov. Your actual family insurance cost may differ, depending upon a number of other factors in addition to the number of people insured on your family health insurance plan.
Coverage: a factor influencing family health insurance cost.
Plans offered on the Marketplace are categorized into metallic tiers: Bronze, Silver, Gold and Platinum to help consumers choose plans based on cost. The metallic tier reflects the value of the coverage, or how health plans and enrollees split the healthcare costs based on expected spending for a typical individual or family. For example, in Bronze plans, the health insurer pays approximately 60 percent of the cost of care, and the individual typically pays 40 percent. In Silver plans, the insurer pays about 70 percent of the cost of care, and the enrollee can expect to pay about 30 percent. Gold plans have an 80 percent/20 percent cost-sharing split between insurer and enrollee on average. Platinum plans have a 90 percent/10 percent split. As a general rule, the more comprehensive the coverage, the higher the premium; the lower the premium, the higher the potential out-of-pocket costs.
Age: a determinant of family health insurance cost
Insurance companies both on and off the marketplace use age as one factor when determining the premium rate. To illustrate using the scenario described above, assume the couple is age 50:
- For a couple, the average monthly premium for a Silver plan is $1,471
- For a couple with one child, the average monthly premium for a Silver plan is $1,782
- For a family of five, the average monthly premium for a Silver plan is $2,403
Plan type: a factor of family health insurance cost
Marketplace health insurance plans are characterized by four basic plan types. Plan types feature participating healthcare provider networks with benefits designed around plan enrollees’ use of healthcare providers who are participating in the plan’s network (in-network providers).
- Health Maintenance Organization (HMO): HMOs tend to have low premiums but require you to select a Primary Care Physician (PCP) who participates in the network and coordinates your care through referrals to specialists in the network for covered services, except in emergencies. Outside of emergencies, you usually pay the entire bill for services you receive outside the HMO network.
- Exclusive Provider Organization (EPO): EPOs also tend to have low premiums. In an EPO plan, you still need to use the health plan’s in-network providers and select a participating PCP to get benefits from your plan, but you usually don’t have to get PCP referrals to see in-network specialists.
- Point of Service (POS): POS plans are more flexible –and typically more costly—than HMOs and EPOs. Usually you select a PCP from the plan’s network but you aren’t required to get referrals for specialized care and you can go outside the plan’s network and receive benefits for covered services. You pay more for out-of-network care, but your insurer pays a portion of the eligible expenses.
- Preferred Provider Organization (PPO): PPOs tend to be the most expensive plan type because they usually offer a broader range of participating providers, don’t require referrals to specialists, and pay a portion of the eligible expenses for covered services provided outside the plan’s network.
How do I find affordable family health insurance?
Consider your family’s health status. Generally, if everyone in your family is in good health, you may want a low premium plan such as a Bronze or Silver plan with high deductibles. Typically, certain preventative care services are not subject to the deductible in these plans.
Consider whether employer-based health insurance is available and viable. Are you thinking of adding a spouse to your plan or children or both? If you or your spouse has access to an employer-sponsored group health plan, be sure to check the cost of adding dependents to the plan. Annual family premiums for employer-sponsored health insurance averaged $22,221 ($1,851.75 per month), according to the 2021 benchmark KFF Employer Health Benefits Survey. Approximately 70 percent of surveyed employers confirmed they paid a portion of the family premium.
If you or your spouse can get affordable health insurance through an employer’s group health plan, but the cost of family coverage under the employer’s plan is cost-prohibitive, there may be an advantage to dividing the family’s coverage: you or your spouse enroll as an individual in the employer’s group health plan; enroll the rest of the family in a Marketplace plan that meets the family’s health coverage needs and the family budget.
Be aware, though, that as long as you or your spouse has access to affordable employer-sponsored health insurance, you cannot get Affordable Care Act (ACA) subsidies in the Marketplace instead of taking the employer-sponsored insurance. ACA affordability is no more than 9.61 % of household income in 2022 and 9.12% for plan years starting in 2023. As long as your dependents have access to the employer-sponsored plan, their coverage is also considered “affordable,” regardless of how much extra it costs to add them to the employer-sponsored plan. Since their coverage is considered affordable, they’re not eligible for premium subsidies (premium tax credits) in the Marketplace.
Consider your family composition. When you add a spouse onto a plan, your monthly premium increases. The premium goes up because you’re charged for each person covered by your plan. However, when you have more than three children under the age of 21 on your family health plan, usually you only pay for the three oldest. Several scenarios below illustrate this point:
- Steve and Jeanne have six children, ages 2, 5, 8, 12, 14, and 16. Although their health plan covers all eight of them, they are only charged on their monthly premium for five people. They’re not charged for their three youngest children.
- Susie has two children, ages 7 and 10. She adopted a child age 4 and adds him to her health plan. Her premium increases when she adds her adopted son and she’s charged for four people on her monthly premium—herself and three children.
- Bob and Donna have four children, ages 17, 20, 22, and 25. Their health plan covers six people. Because two of their children are over age 21, they’re charged on their monthly premium for all six people.
The cost of adding a child to your health insurance depends upon the age of the child and the number of other children under age 21 on the family health plan.
What options do I have to reduce the cost of family health insurance?
If you buy your own health insurance, you may get help paying for it from the government. The Advanced Premium Tax Credit subsidy lowers monthly premiums for those whose household income is below 400 percent of the Federal Poverty Level (FPL) and choose a Silver plan on the Marketplace. However, the passage of the American Rescue Plan Act of 2021 expanded ACA subsidies, and eliminated the cap on household income. Individuals may be eligible for premium subsidies if the cost of their premiums is more than 8.5% of their income and they don’t have access to other affordable health insurance. The provision continues through 2025 under the Inflation Reduction Act of 2022. When you’re shopping for plans on eHealth’s website, you’ll be able to see if you are eligible for the tax credit subsidy or other cost-sharing savings.
You could choose a High Deductible plan that pairs with a health savings account. Health savings accounts, or HSAs, are accounts that you use to pay for medical expenses. You save on taxes with a health savings account because the money you put in and take out is either tax-free or tax-deductible. You can also save on your monthly premium because High Deductible health insurance plans paired with HSAs are inexpensive.
The Children’s Health Insurance Program, or CHIP, is a joint Federal-state effort to provide free or inexpensive insurance to families with children. The specific requirements for this program vary from state to state, but, in general, your family will qualify if you make too much money to qualify for Medicaid but your income is below 200% of the federal poverty line.
One alternative to traditional health insurance plans for families is short term health insurance. Short term plans usually do not have the same level of coverage as major medical plans, and insurance companies can deny short-term coverage based on pre-existing conditions. Although you won’t be receiving the same benefits with short term coverage, you will likely be paying a lot less in premium. If affordability is an issue, and you need temporary coverage, short term health insurance might be an option for you. Keep in mind that not all states offer options in short-term plans.
Where to Get Started
If you are in the market for health insurance for your family, eHealth offers access to a wide selection of plans. In order to help you weigh all of your options, we offer 24/7 support and licensed brokers in every state to help you find the best plan for your family. To learn more about selecting and paying for quality family health insurance, begin comparing health insurance plans in your state today.