Premium

The cost of having coverage

Your premium is the recurring bill for your health insurance. You pay it every month to keep the policy in force, even in a month when you never see a doctor. It is separate from the costs you pay when you actually use care, like deductibles, copays and coinsurance.

Miss a premium payment and you risk losing coverage. Marketplace plans with a subsidy have a three-month grace period; other plans usually allow a shorter window.

What drives your premium

On ACA-compliant plans, insurers can only use a handful of factors to set your rate:

• Age, with older adults paying up to three times what younger adults pay.
• Location, by county or ZIP code.
• Tobacco use, which can add a surcharge.
• Who is covered, meaning how many people are on the plan.
• Plan category, since gold plans cost more than bronze for the same person.

Your health history cannot affect an ACA-compliant premium.

Example: the same family, two pictures

Consider a couple in their late fifties who retired early. On the Marketplace, if their household income is under 400% of the federal poverty level, a premium tax credit pays part of their premium and their net monthly bill could be a fraction of the full price. If a one-time capital gain pushes them over the 2027 line of $86,560 for a household of two, they lose the entire credit and pay full price.

That same couple might qualify for a private underwritten plan whose premium depends partly on their health answers. If both are healthy, the private option can land well below the unsubsidized Marketplace rate. If either has significant conditions, the Marketplace plan may be the better buy.

Marketplace vs private plans

Marketplace premiums are the same for everyone of the same age, location and tobacco status, and subsidies can lower your share. Private plans outside the Marketplace may use health questions, may offer different benefit designs, and can be applied for year-round. A lower premium on a private plan can come with narrower benefits or exclusions, so compare the whole package.

Premium vs total cost

The cheapest premium is not always the cheapest year. A bronze plan with a low premium and high deductible can cost more overall than a gold plan if you use a lot of care. Add up a full year of premiums plus your likely out-of-pocket spending before you decide.

Why your premium went up

Rates change every year due to medical inflation, insurer pricing, your age band and subsidy rules. If your renewal jumped, our guide on why your health insurance premium went up explains the usual causes, and private health insurance cost covers what goes into a private quote. For a side-by-side look, request a quote.