Insurance involves monthly premiums, deductibles, categories, out-of-pocket expenses, out-of-network costs, and premium tax credits. And for a lot of people, these terms can bring up stress and confusion.
Those searching for the best individual or family plan often come across these daunting terms. It can be hard to fully understand what any of it means and how it impacts your bottom line. Plus, you may not know how to effectively compare plans.
In this article, we’ll be diving into areas that you should be considering when looking at healthcare plans and why they matter. You’ll also learn about the best family health insurance plans and how to choose the right one for you.
Things to Know Before You Pick a Health Insurance Plan
Choosing an individual or family health insurance plan isn’t easy. First, you have to do your research on monthly premiums, out-of-pocket costs, out-of-network expenses, tax credits, and more before you make a decision.
It’s a lot, to say the least. However, it’s not impossible once you break it down and have a comprehensive understanding of what each term means and how it may affect you.
Below are details that you should take into consideration as you look at all of your plan options.
Your Total Costs for Healthcare
The first thing to consider when looking for an affordable health insurance plan is what’s called a monthly premium. These are bills you pay monthly, even when you aren’t using the medical benefits provided to you and your family.
The type of insurance you choose, who’s covered, age, and other medical risks determine the amount you pay in monthly premiums. You also have out-of-pocket expenses, which include a deductible and a co-pay.
Deductibles are what you pay out of pocket when receiving services, and can have a yearly limit. Meanwhile, co-pays are a fixed amount that you pay for certain medical care (X-rays, specialist visits, and more).
After you meet your deductible limit, some health plans may pay for all of your covered medical care until the policy renews. Once your policy renews, you must pay deductibles again until you reach your maximum.
Also, you should consider how much your premium is in comparison to your deductible. If you don’t use your insurance often, it’s best to pick an option with a lower premium rate and a moderate or high deductible. But if you plan to use it often, then a plan with a lower deductible is the best option.
The Four “Metal” Categories
There are four categories of health insurance plans, otherwise known as the “metal” categories. Bronze, Silver, Gold, and Platinum. These categories have nothing to do with the quality of your medical care. Rather, they indicate how you and your insurer will share costs.
The lowest tier of health plans is labeled Bronze. With these, you pay the lowest premium every month but have high deductibles. That means seeking care will involve a higher cost because it will take more to reach your deductible. These plans are ideal for those who just want coverage for worst-case scenarios. With Bronze plans, your insurance pays 60 percent while you pay 40 percent.
Silver health insurance plans are one step above Bronze and have a slightly higher premium. However, deductibles will be lower when you seek care. If you qualify for cost-sharing reductions, you must pick a Silver plan. For 2023, the majority of applicants can find a Silver plan for $10 a month, according to the Department of Health and Human Services (HHS). With a Silver plan, your insurer will pay 70 percent while you pay 30 percent.
Gold is the second-highest medical plan option, and is best for routine visits to a physician or if you need constant care. Plans under the Gold tier will pay 80 percent of your medical costs. You’d be responsible for the remaining 20 percent.
Lastly, Platinum medical plans have the highest monthly premium. That means people in frequent need of care can rest easy knowing that most of their costs are covered by their insurer.
Premium Tax Credits
No matter the “metal” you choose, you should take advantage of premium tax credits if you’re eligible. You can use these to make health insurance more affordable. Plus, you can lower your monthly insurance payments when you enroll in an ACA plan on the Health Insurance Marketplace.
There is a requirement, though. Prior to the American Rescue Plan Act of 2021, only people with household incomes at 400% of the federal poverty level and below are eligible for premium tax credits. Some households over 400% FPL are now eligible for some premium tax credit depending on specific factors. Households under 100% FPL are eligible for other programs like Medicaid. If you have a Silver plan, you may also get cost-sharing subsidies that reduce out-of-pocket expenses depending on household size and income. To find out if you’re eligible, simply enter your household information on the marketplace website. After doing so, you’ll find out whether you’re eligible for those discounts and how much you can save.
If you aren’t eligible for a premium tax credit, you may be eligible for other subsidies. Those are discussed in further detail below.
Out-of-Network Coverage
Generally speaking, most health plans have what’s called in-network and out-of-network services. Usually, the in-network services are more affordable than the out-of-network services.
This can impact the facilities and doctors you visit for medical care. Therefore, it’s important to note an insurer’s policies on this. Visiting a preferred provider or facility that isn’t in your insurer’s network means that they don’t share a contract. You may have to pay in full if you aren’t careful.
When doing your research on medical plans, make sure to have a list of doctors and facilities you prefer. It’s most affordable to select the plan that covers those doctors and facilities. Additionally, you could also choose a plan that’s more forgiving and flexible with out-of-network coverage.
Out-of-Pocket Maximum
Health insurance plans also define an out-of-pocket maximum. This is the maximum amount you're liable to pay before your insurance company pays for 100% of your care. So, choosing an affordable plan will also mean paying close attention to the out-of-pocket maximum.
Usually, this amount is also the most you can pay for health care services in a single year. Deductibles, copays, and coinsurance for any in-network care all count towards this maximum. However, monthly premiums and out-of-network services do not count towards your maximum. Once you’ve reached your maximum, your insurer begins to fully cover your costs for the remainder of the year.
Like deductibles, maximums renew at the beginning of the new year when your policy renews. This means that starting at the beginning of the new year, you’ll be responsible for paying out-of-pocket expenses until you reach the maximum again.
Options for Individual & Family Health Insurance Plans
Remember that plans can differ in the quality that they offer. Some may cover almost any doctor and service. Meanwhile, others may be extremely limiting. This is true for both individual and family health insurance.
So, outside of financial research (which can be strenuous and tiring), you should understand plan types and how their quality could impact your care.
Below are some plan options that your insurer may offer you and the quality differences between them.
PPO Plans provide a wide network of doctors and specialists that you can visit at a reduced rate. Typically, people on this plan don’t need to choose a primary care physician (PCP). This kind of plan also includes a deductible, copays, and coinsurance for certain services.
HMOs only allow you to see physicians that are within your network, and you need a referral from your PCP to see a specialist. While you can add a deductible and copay, they’re usually low.
HSAs include a health savings account, which lets you save money tax-free to pay for future medical expenses. However, these do have a higher deductible than other plan types but are usually the least expensive option.
Catastrophic health plans are bare minimum coverage and are meant for people under 30 years old or for those who qualify for a hardship exemption. To see if you qualify, please speak with a licensed agent or your healthcare provider.
Generally speaking, PPOs and HMOs offer more coverage for a higher premium. Meanwhile, HSAs and catastrophic health plans cover less for a lower premium. So always check your plan type, and know which plans best suit you and your needs.
How Much Does a Family Health Insurance Plan Cost?
Costs vary plan by plan, and tiers like Bronze and Gold will also affect how much you pay. However, in 2022 the average monthly premium cost of a Silver plan for a 40-year-old couple was $1,050. With a child added, the average would increase to $1,362 per month. Then, for a family of five, a monthly premium is nearly $2,000.
According to Forbes Advisors, these numbers are based on the national average premiums of marketplace plans. Actual costs can differ and depend on several factors. These include the number of people insured on the policy.
As a general rule, the more comprehensive the coverage is, the higher the premium will be. The lower the premium is, the higher the out-of-pockets can be. You may think of this as a trade-off. The plan you choose is determined by how often you and your family use the benefits you’re paying for.
Insurance companies, both on and off the health insurance marketplace, also use age as a factor when determining a premium rate. For example, couples over 50 could pay an average monthly premium of almost $1,500 for a Silver plan. That rate rises for each child or person added to the plan. That’s significantly less than what younger couples pay. This is because the insurers view an older couple as a higher risk, so they raise the premium rate. For you and your spouse, that means expecting rates to rise as you grow older.
Federal Government Subsidies on Individual and Family Health Insurance
Paying for health insurance can easily become burdensome, especially if you can’t afford the options given to you. To help with that, the federal government offers what’s called subsidies to individuals and families who qualify. Subsidies are based on their income and household size. There are two kinds available: Advanced Premium Tax Credit (APTC), and Cost Sharing Reductions (CSRs).
To be eligible for a subsidy, you have to reach certain qualifications.
As previously stated, your income must be above the 100% Federal Poverty Level.
You also can’t be eligible for public coverage like Medicaid, the Children’s Health Insurance Program (CHIP), Medicare, or coverage through the Armed Services.
You can’t have affordable access to insurance through an employer. (Affordability is defined by the percentage of premium that the employee is responsible for.)
To estimate the exact subsidy amount that you potentially qualify for, you can use an online calculator.
FAQs about Individual and Family Health Insurance Plans
What is the average cost of health insurance for a family of 4 in the US?
Although costs can differ from plan to plan, a family of four can generally expect to spend around $2,000 a month in premiums. Numerous factors like age and household size can affect monthly premium costs
Also, insurance companies place a higher risk on older couples. What you and your spouse pay now in your early 30s will rise as you get older. That may mean changing plans in the future or planning for higher premium rates.
Which company is best for family insurance?
There is no “best” company when it comes to health insurance. However, with great research and a chat with a licensed agent, you can find the most fitting company and policy that your family qualifies for.
To have a full understanding and mapped-out comparison of every plan option that’s available to you, speak with a licensed agent. This can help you make the right decision for both you and your family.
What is the cheapest health insurance for families?
If you’re looking for a cheaper monthly premium, plans within the Bronze tier are typically cheaper. However, these plans often have a higher deductible which makes what you pay at the doctor's higher.
If you’re looking to pay less in deductibles, then Platinum plans are the best option but the monthly premiums are the highest. Additionally, plans with low monthly premiums often have high deductibles. Meanwhile, plans with low deductibles often have high premiums. So, determining the best and cheapest option will depend on your family’s service use.
Get the Best Individual and Family Health Insurance
Getting the best individual or family health insurance involves a lot of research, and plan comparisons.
To choose the option that best fits you and your needs, make sure to look at:
Monthly premiums
Tax credits and other subsidies
Plan tiers and categories
Out-of-network costs
Out-of-pocket maximums
Plan tiers and categories – the “metals” like Bronze, Silver, Gold, and Platinum — have a direct impact on your monthly premiums and deductibles.
The lower the premium rate, the higher the deductible. This is not ideal if you or your family frequently seek medical care. And the lower the deductible, the higher the premium rate. Therefore, people who rarely use their benefits or seek medical care should avoid these plans.
Also keep in mind factors like deductibles, coinsurance, and copays. Remember that these count towards your out-of-pocket maximum which renews at the beginning of the new year.
Some insurance plans may also fully cover costs after you maximize your deductibles. Like out-of-pocket expenses, deductibles also renew at the beginning of the new year with your policy.
Additionally, some restrictions come with certain plans, like HMOs, so not all plans are designed equally. This can restrict facilities and doctors that you receive care from and can impact your in-network and out-of-network expenses based on their policies.
Consider the facilities and doctors that you prefer to receive medical care from. You may want to consider plans that either cover those visits as in-network or have forgiving policies on out-of-network services.
Lastly, make sure that any prescription medicine you have will be covered by your new plan. Otherwise, you could be stuck with a heavy bill every time you fill or refill a prescription.
Speaking with a licensed agent will help you get a full scope of your eligibility and the plans you qualify for. This significantly reduces the overwhelm that often comes with finding a comprehensive healthcare plan.
Learn More with Health Plans of North Carolina
Feeling swamped, overwhelmed, and confused is challenging when you find yourself facing multiple care options for you and your family.
The only way to boost your confidence back up and ease your concerns is to compare the best plans available. You can effectively and easily achieve this with the help of a licensed expert.