What Is A Health Insurance Premium? – Forbes Advisor


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For those who use medical insurance to assist cover your health care costs, you’re likely paying a monthly premium every month. This fee entitles you to the coverage outlined in your medical insurance plan. Medical insurance, including premiums, may be tricky to grasp. Read on for a comprehensive review of medical insurance premiums and the way they work.

What Is a Health Insurance Premium?

A medical insurance premium is the monthly amount you pay for the medical insurance plan you select. “Your premium is generally billed on a monthly basis like a subscription,” explains Josephine Pepa, pharmacist and CEO of Over Your Counter, a web based service aiming to offer personalized guidance and education about wellness and self-care. Some plans may require premium payments quarterly or annually, adds Linda Chavez, founder and CEO of Seniors Life Insurance Finder.

Unfortunately, incomes within the U.S. don’t all the time sustain with the increasing costs of premiums and deductibles. The truth is, a study conducted by the Commonwealth Fund found premium contributions and deductibles in employer health plans consumed 11.6% of median household income in 2020—up from 9.1% a decade earlier.

How Health Insurance Premiums Work

There are numerous aspects that affect how much you pay on your medical insurance premium. “In case your plan allows access to an unlimited network of providers, your monthly premium will probably be higher than it will be in case your plan only allows access to a handful of doctors and hospitals.” says Pepa. “The fee of your premium also is determined by the variety of dependents covered, your location, age, the precise plan category chosen and tobacco use.”

Different Sorts of Health Insurance Premiums

Medical insurance plans fall under 4 important categories, in accordance with the Healthcare.gov Marketplace: Bronze, Silver, Gold and Platinum. “While Bronze plans typically have lower monthly premiums, their out-of-pocket costs are higher,” says Pepa. “Platinum plans, alternatively, often include higher premiums and lower out-of-pocket costs.”

Ways to Reduce Your Health Insurance Premium

For those who’re concerned about the fee of your medical insurance premium, listed below are several suggestions that couls enable you to lower the fee.

Purchase as Early as Possible

“Age is a very powerful consider determining your premium,” says Chavez. “Insurance firms charge higher premiums to older people. Subsequently, the sooner you buy medical insurance, the lower your premium will probably be.”

Select the Right Plan

There are lots of several types of medical insurance plans available. Some plans have higher premiums than others. It’s best to select a plan that has a premium you’ll be able to afford while still providing the coverage you wish, says Chavez. “For those who use your medical insurance often, paying the next premium every month will generally prevent in expenses you could have to pay out of pocket, but for those who rarely use medical care, choosing a low monthly premium with less coverage will likely prevent money,” says Brynna Connor, M.D., a health care ambassador at NorthwestPharmacy.com.

Take part in Preventative Care

Benefiting from preventative care services, resembling blood pressure tests and cancer screenings, can also help reduce your premium price, says Todd Ackerman, an independent agent at World Insurance Associates in Burlington, Iowa. By doing so, you’ll be able to catch issues early on before they grow to be more serious and expensive—and potentially increase the fee of your premiums. Fortunately, most medical insurance plans cover preventative care.

Lead a Healthy Lifestyle

Ackerman also recommends doing all your best to practice habits that may keep you healthy and lower your premiums. Eat healthy, exercise repeatedly and take a look at to get no less than eight hours of sleep each night.

Stop Smoking

The Reasonably priced Care Act allows insurance firms to charge smokers as much as 50% more for premiums. For those who smoke, Pepa encourages you to quit to lower your expenses in your premium (and improve your long-term health).

Enroll in a Health Savings Account (HSA)

A health savings account is a private savings account for health care expenses that you simply own. The cash you deposit will not be taxed. If possible, Pepa recommends opening an HSA to assist cover premium and other health care costs.

Sign Up for an Account on Healthcare.gov

Even for those who have already got medical insurance, Dr. Connor recommends creating an account on healthcare.gov and following the instructions to use for insurance. By doing so, you’ll be able to find out about potential insurance subsidies available to you. For the reason that subsidies change, it’s a great idea to reapply every 12 months.

Conduct an Annual Review

To seek out areas of overlap and reduce your premiums, Anthony Puopolo, M.D., chief medical officer of the telemedicine company Rex MD, says to reevaluate your prescription drug needs, the quantity of needed doctor visits and tax break options every 12 months.

Other Major Considerations for Health Insurance Premiums

When exploring medical insurance plans and premiums, Chavez suggests considering the next aspects.

Your Health

Healthy persons are less prone to make claims on their insurance policies. Because of this, you’ll likely pay a lower premium for those who’re in good health than someone who’s unwell.

Your Lifestyle

For those who live a dangerous lifestyle during which you smoke or engage in other dangerous activities, your premiums will probably be dearer than someone who lives a healthier lifestyle.

Your Location

Where you reside can also affect your medical insurance premium. “For those who live in an area with a high cost of living, you’ll likely pay the next premium than someone who lives in a inexpensive area,” says Chavez.

Your Family History

If you could have a family history of health conditions, resembling heart disease or cancer, you’ll likely pay the next premium than someone who doesn’t have a family history of chronic illness.

Your Job

If you could have a job that requires you to travel or work in dangerous conditions, you’ll likely pay the next premium than someone with a sedentary job.

“You actually have to think about what you wish out of your medical insurance plan—and never plan for being 100% healthy on a regular basis, even for those who’re young and have been healthy previously,” adds Dr. Connor. “Illness or injuries can occur unexpectedly, so be realistic about what you wish and what you’ll be able to afford.”

Coverage area

Offers plans in all 50 states and Washington, D.C.

Variety of providers in network

About 1.2 million

Physician copays start at


Coverage area:

Offers plans in all 50 states and Washington, D.C.

Variety of providers in network

About 1.7 million

Physician copays start at


Coverage area

Offers plans in all 50 states and Washington, D.C.

Variety of providers in network

About 1.5 million

Physician copays start at




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