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Health insurance cost

How much does health insurance cost?

There’s more to health insurance costs than the monthly premium. And understanding these costs and when you pay them is essential when shopping for the right plan — one that meets your health needs and fits your budget.

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How much will individual health insurance cost you?

Several factors can affect how much you’ll pay in monthly premiums for a health plan. They can include:

  • Age — Monthly premiums can be higher for older people and lower for younger people.
  • Household income — Your household income may affect how much you’ll pay for coverage and which plans are available to you. When you apply for coverage, you’ll need to provide your expected household income for the year you want coverage.
  • Tobacco use — Monthly premiums can be higher for tobacco users than for those who don’t use tobacco.
  • Type of plan — While all Affordable Care Act (ACA) health plans must cover the same essential health benefits, they differ in the monthly premium, deductible, copay, and coinsurance amounts. Learn more about the cost components of a health plan and compare cost and coverage by metallic category.

Note: Your current health, medical history, or gender cannot affect your premium.

You may be eligible for help paying for health insurance

You may be able to get help paying for some or all of your health insurance.

Catastrophic plans

AmeriHealth offers catastrophic plans to individuals under 30 and those with extreme financial hardship. Catastrophic coverage protects you from the costs of worst-case scenarios, providing coverage for hospitalization or serious illnesses.

Premium Tax Credits

Federal premium tax credits can help lower your monthly premium payments. Eligibility for the premium tax credit is based on several things, including your income and household size. You can apply some or all of your premium tax credit to your monthly insurance premium payment. Find out if you’re eligible at Get Covered NJ.

Cost-sharing reduction

If you qualify for a premium tax credit and have a household income below 250 percent of the federal poverty level, you may also qualify for a Cost-sharing Reduction (CSR). This lowers the amount you pay for out-of-pocket costs, such as deductibles, copays, and coinsurance. It means you will pay less out of pocket each time you get medical care, including at the doctor’s office, hospital, or urgent care center.

If you qualify for a CSR, you will get it only if you enroll in a health plan at the Silver level. When you shop for plans, look for the plan level: Bronze, Silver, or Gold. You can use a premium tax credit for a plan at any level, but you will only get the extra savings if you choose a Silver CSR plan.

If you qualify for CSRs, you will also have a lower out-of-pocket maximum. Every time you pay out of pocket at the doctor’s office or for prescription drugs, those payments go towards your maximum. When you reach your maximum, your plan covers 100 percent of all covered services.

State-based financial savings

New Jersey Health Plan Savings (NJHPS)

New Jersey residents also have access to a state subsidy called New Jersey Health Plan Savings, which can help lower the cost of health insurance. Residents qualify for this subsidy based on income. Households with annual incomes up to 600 percent of the federal poverty level will receive NJHPS.

In 2022, an individual with an income of up to $77,280 and a family of four who makes up to $159,000 can receive state subsidies to lower the costs of health insurance. These savings are in addition to federal financial help.

Alaska Native Claims Settlement Act (ANCSA) Corporation shareholders

If you are a member of a federally recognized tribe or are an Alaska Native Claims Settlement Act (ANCSA) Corporation shareholder, you may qualify for more savings.

What contributes to the cost of health insurance in the U.S.?

There is no one reason why health care costs as much as it does. It is instead the result of a lot of contributing factors, such as:

  • Chronic conditions. It has been estimated that 86 percent of health care spending is due to chronic conditions.1 While some conditions are genetic, many can be prevented by making better lifestyle choices, such as eating healthy, exercising, limiting alcohol consumption, and not using tobacco.
  • Advances in medical technology. Finding new and better ways to treat illness and injury is good, but the research and equipment can be costly.
  • Prescription drugs. The research and development of new drugs and treatments can be expensive, and it often affects the price of the drug. Even when a more affordable generic equivalent exists, many people still opt for the more expensive brand-name version.
  • Aging population. As we get older, we need more medical attention. New Jersey has a high population of older adults, with an estimated 16.9 percent aged 65 or older.2
  • Uninsured population. Hospitals and doctors are required to treat people without insurance. These costs are often passed on to those who have health insurance, resulting in higher premiums.
  • Medicare and Medicaid payments. When payments to doctors and hospitals drop below the actual cost of the care, health insurers are usually required to pay the difference.
  • Provider cost increases. While doctors and hospitals need to receive fair and competitive compensation, sometimes their cost increases exceed the rate of inflation.
  • Fraud and abuse. Health care fraud and abuse not only threaten the quality and safety of care, but they waste billions of dollars each year.3 The National Health Care Anti-Fraud Association estimates conservatively that health care fraud costs the nation tens of billions of dollars annually.
  • Fear of malpractice suits. Some doctors and hospitals use more intensive diagnostic testing to confirm diagnoses and lower their risk for malpractice liability.