Having health insurance is important but depending on factors like the plan type and deductible, the premiums can be expensive. If you’re wondering how to save on health insurance, you’re not alone.
We’ll explain what criteria impact health insurance rates and share how to save money on health insurance premiums. We’ll also look at some of the top health insurance companies and how their premiums compare.
Factors Influencing Cost
The cost of health insurance is based on a variety of factors. Your age, location, and insurer are a few of the things that can impact rates.
Age
In general, young people pay lower health insurance premiums than older people. In fact, premiums for older individuals can be up to three times higher than premiums for younger people.
Location
Where you live can impact the cost of your health insurance plan. Specifically, the cost of living in your location, state rules and regulations, and market competition influence premiums.
Insurance Company
Health insurance companies charge different rates for their plans. Comparing plans from multiple insurance companies can, in general, help you see which companies charge lower premiums for their coverage.
Tobacco Use
When you apply for coverage through the Health Insurance Marketplace, you will be asked to disclose your tobacco use. Depending on the state, non-smokers typically pay up to 50% lower rates than smokers. However, insurers in California, Massachusetts, Rhode Island, Vermont, and Washington D.C. are not allowed to charge higher rates for smokers.
Plan Category
Every health insurance plan sold through the Health Insurance Marketplace has a metal tier category: bronze, silver, gold, and platinum. Bronze plans have the highest out-of-pocket cost (40% of covered services after deductible) and the lowest premiums, whereas platinum plans have the lowest out-of-pocket costs (10% of covered services after deductible) and the highest premiums.
Individual vs. Family Plan
Depending on your household size, you can purchase an individual plan or a family plan. Family plans tend to be more expensive than individual plans because they cover more people.
How to Save on Health Insurance
Health insurance can be costly, but there are ways to lower your rate. If you want to know how to save on health insurance costs, here are some suggestions that may reduce your premium.
Use a Premium Tax Credit
If you purchase a health plan through the Health Insurance Marketplace, you might be able to qualify for an advanced premium tax credit (APTC). This credit lowers your insurance premium based on your income and household size. In 2022, the average estimated monthly APTC was $508.
You must reapply for a premium tax credit every year. If your income or household size changes, your premium tax credit could change.
Apply for Medicaid/CHIP
Some individuals and families with low income can qualify for low-cost or free health insurance through Medicaid or the Children’s Health Insurance Program (CHIP). Medicaid/CHIP eligibility requirements are based on your income and family size, but the exact requirements are different in every state.
Itemize Your Tax Deductions
Choosing itemized deductions when you file taxes lets you deduct individual or family health insurance medical expenses, including premiums. However, you can only deduct medical expenses you paid above 7.5% of your adjusted gross income (AGI).
Choose a Higher Deductible
Choosing a health insurance plan with a high deductible will result in a lower monthly premium. For example, for a single 25-year-old in Miami-Dade County, Florida, the lowest premium for an Aetna bronze plan with an $8,700 deductible is $284.14 per month. An Aetna gold plan has a $1,450 deductible and is $432.10 per month.
When you choose a high-deductible health plan (HDHP), you’ll spend more money out-of-pocket before your health insurer will start paying for covered medical care.
Get an HSA
A health savings account (HSA) can help you save money for qualifying health expenses. You can only get an HSA if you purchase an HDHP through the Health Insurance Marketplace. While you can’t use HSA funds to pay for your health insurance premiums, you can use the money to pay your deductible, coinsurance, copayments, and other qualified medical expenses.
Purchase a Catastrophic Plan
Consider getting a catastrophic health insurance policy if you need to save money on monthly premiums. Catastrophic health plans are available to individuals under 30 or people over 30 who qualify for a hardship or affordability exemption.
Catastrophic plans have very low premiums but extremely high deductibles. For 2023, the annual deductible for a catastrophic plan is $9,100 for an individual and $18,200 for a family.
Shop Around
Because the cost of health insurance may differ based on your insurance company, it can be helpful to shop around and compare several plans. You should also re-shop for health insurance during Open Enrollment to see if another plan might be better suited for your coverage needs or your budget.
Top Health Insurance Companies
There are many health insurance providers on the market. To find the best health insurance company, it’s important to evaluate multiple insurers based on features, like cost, ratings, and plan types. We chose the following health insurers based on in-depth research across dozens of categories and hundreds of data points.
Best for Robust Coverage: Blue Cross Blue Shield
Blue Cross Blue Shield (BCBS) offers comprehensive health insurance coverage in all 50 states and Washington D.C. There is a wide range of ACA plans available, as well as short-term health insurance and adult and pediatric dental plans. This company also offers a good variety of health management programs. In Miami-Dade County, the lowest BCBS bronze plan premium is $475.27. The lowest physician copay is $0, and the lowest specialist copay is $20.
Best Value Plans: Oscar
Oscar’s health insurance plans provide the best value for your money. There are several plan types to choose from and a large selection of health management programs. Members also get access to benefits like $0 virtual urgent care and prescription deliveries. The lowest bronze plan premium in Miami-Dade County is $396.38. The lowest physician copay is $0, and the lowest specialist copay is $55.
Highest Quality Plans: Kaiser Permanente
Kaiser Permanente has the highest-quality health insurance plans based on our rankings. Kaiser Permanente has a perfect 5-star rating from Healthcare.gov, as well as an average NCQA rating of 4.28 out of 5. J.D. Power also rated its plans the best for overall customer satisfaction in multiple U.S. regions. The lowest premium for a bronze plan in Miami-Dade County is $313.10. The lowest physician copay is $65, and the lowest specialist copay is $80 after the deductible is met.
Best for Same-Day Care: Aetna CVS Health
Aetna sells health insurance plans through CVS Health. As an Aetna member, you can get access to free preventative care and virtual care, as well as $0 CVS MinuteClinic visits for same-day medical care. Aetna sells bronze, silver, and gold plans through the Marketplace in 21 states. In Miami-Dade County, the lowest premium for a bronze plan is $345.83 and there are no copays after the deductible is met.
Best for Medicare Advantage Plans: UnitedHealthcare
UnitedHealthcare is an excellent provider if you want a Medicare Advantage (MA) plan. The company sells MA plans through AARP in almost every state. The company has an average Medicare Advantage star rating of 4.18 out of 5 and an average NCQA rating of 3.88 out of 5. Plans include $0 copays for primary care, virtual care, prescriptions, routine vision, and hearing care, and select dental services. Members can also join the Renew Active program to get free access to gyms or at-home fitness classes.
How Much Does Health Insurance Cost?
The cost of health insurance depends on several factors, including your age, location, and plan type. For example, for a single 45-year-old in El Paso, Texas, bronze plan premiums range from $355 to $451 and gold plan premiums range from $470 to $662. For a 60-year-old in the same location, bronze plan premiums range from $667 to $848 and gold plan premiums range from $883 to $1,244.
What Are the Factors That Will Affect Your Health Insurance Premium?
Health insurance companies look at a variety of criteria to calculate premiums. Your location, age, tobacco use, plan type, and dependents can all impact your rate. The health insurance company you choose can also affect the cost of your policy.
Can You Negotiate Your Health Insurance Premiums?
Health insurance premiums are usually non-negotiable. However, there are other ways to get a lower rate. Taking advantage of premium tax credits, choosing a catastrophic plan or an HDHP, and comparing plans from multiple providers can help you save money.
What Are the Disadvantages of a High-Deductible Health Plan?
The main disadvantage of an HDHP is that you pay a large amount of money out-of-pocket for your medical care before your insurance company starts paying its portion. If you visit the doctor frequently, an HDHP may not be the best plan for you.
Why Is Healthcare So Expensive?
Health insurance premiums are expensive because the cost of medical care in the U.S. is increasing. As the population ages, more people need long-term treatment for chronic conditions. Additionally, new medical technologies, procedures, and pharmaceuticals are driving up the cost of healthcare, which is causing insurance premiums to rise.
