Nearly 61% of Americans rely on an employer-selected group health plan for insurance coverage 1 . However, many Americans purchase an individual health policy because they aren’t eligible for an employer-sponsored group plan, want more choice over their healthcare, or for other reasons. If you aren't able to participate in a group health plan or have the option to choose between group and individual insurance coverage, you need to know the differences to make the right call for you and your family. In this article, we’ll go over the average cost of both group and individual health insurance and cover additional benefit options that can make your insurance more affordable.
Employer-based health insurance covers about 165 million people, making it the most popular coverage option today. Providing health insurance is a great way for businesses to gain a competitive edge in hiring, boost employee retention, and improve workplace satisfaction and productivity.
Group health insurance premiums can vary by age, number of participating employees, the company’s medical claim history, industry, etc. But to give you an idea, KFF conducts an annual survey that provides some insight into the cost of employer-sponsored health insurance 2 .
In 2023, the average amount that employees contributed toward the cost of health employer-sponsored insurance premiums was:
The average premium costs for employer-sponsored self-only plans have remained roughly the same over the past few years. However, the average premium for family coverage has increased by 22% over the last five years and 42% over the previous ten years.
In 2023, employers contributed roughly $7,034 yearly toward self-only premiums and about $17,393 toward family premiums.
Rising health insurance rates impact employers and employees alike. When estimating the cost of health insurance, employees should factor in the premiums' cost and consider their annual deductible to see if their plan is feasible.
The average deductible for single coverage in 2023 was $1,735, slightly lower than the 2022 deductible. However, the average deductible for single coverage has increased by 10% over the past five years. Health insurance deductibles may continue to rise in the coming years.
If your employer doesn’t offer you health insurance as part of an employee benefits program, you have another option. You can purchase an individual health plan through a private or public exchange. Private exchanges include working with insurance agents, brokers, and health insurance companies directly. Public exchanges are state-based marketplaces and the federal health insurance marketplace.
It’s normal for consumers to be concerned about the cost of an individual insurance policy. Historically, health insurance rates can be unpredictable, and each company differs.
Luckily, the Affordable Care Act (ACA) makes your monthly health insurance premium more predictable. Health insurance carriers can no longer determine your price based on certain factors, such as gender or a pre-existing condition.
An ACA-compliant plan must also include certain covered medical services. Plans must cover the ten essential health benefits, such as preventive services, hospitalization, and mental health care.
The average monthly cost of care with individual health insurance varies depending on certain factors like:
In 2023, the average monthly premium for a 40-year-old on a benchmark plan without premium tax credits was $456 3 . A benchmark plan is the second-lowest-cost silver plan tier on public marketplaces. Family plan premium rates will vary based on family size. But, a family of four paid an average of $1,437 a month for an unsubsidized plan 4 .
Depending on your annual income level and other necessary information, you may qualify for premium tax credits through the marketplace. These cost-saving subsidies can help you purchase affordable health insurance coverage. However, you can only receive these subsidies for marketplace plans, not those you purchase on a private exchange.
When you compare individual and group plan coverage options, it’s easy to see individual health insurance policies tend to be more affordable than employer-sponsored plans.
Average individual health plan premiums
Average group health plan premiums
Self-Only