For anyone in California looking to buy health insurance, a common question may well be, “What is it going to cost me?”
The answer, however, is going to be, “It depends.”
This is because there is no “one price fits all” formula for health plan premiums and copays. There are, in fact, several deciding factors that must be considered. However, there are some average numbers that can be useful for planning purposes.
Average Health Insurance Costs for California Residents
The cost of health insurance has risen significantly since 2010 although many aspects have changed for the better. For example, before the passage of the Affordable Care Act (ACA) health insurance costs were based on a variety of factors, but those variables have since decreased significantly.
A little background: The Patient Protection and Affordable Care Act was signed into law on March 23, 2010. It is more commonly known as the Affordable Care Act (ACA). The act requires every American to have health insurance and helps those who cannot afford a plan.
To simplify matters when it came to categorizing the multitude of plan options available, the Act required insurers to use a tiered system that is often referred to as the “metal tiers”. This is the scheme that uses Bronze, Silver, Gold, and Platinum levels of coverage with the monthly premium costs typically being higher for each successive tier.
Who, What, and How: Coverage Factors
When it comes to determining the “average” health insurance costs, most people are primarily concerned with the amount they must pay each month of their premium. If your insurance is provided through your employer, you will most likely be required to pay a large share of that premium while your employer pays the rest.
If you are self-employed or elect to go with an individual plan instead of your employer’s offered plan, you will likely be paying 100 percent of the monthly premium. “Likely” because those individuals in California who qualify for coverage through the state health exchange, Covered California, will only pay a portion of the actual premium, while the balance is paid through a tax subsidy program.
So, what is the average cost for health insurance?
In 2021, for a 40-year-old, the average national cost of individual health insurance across all metal tiers of coverage is $495 per month. This is roughly 2 percent lower than in the 2020 plan year.
In California, however, the same individual will be looking at a monthly cost of $588 and an annual cost of $7,056. This represents a cost that is 18.80% higher than the national average. On the plus side, our premium costs only increased 2.03% over last year.
However, not everyone is a single, 40-year old and the factors that help determine actual costs must be considered.
What Determines Health Insurance Cost in California?
In California, as in most states, there are three main factors that are used to determine health plan costs and, in particular, the monthly premium.
Participant’s Age
Starting with a base age of 21, premium costs are typically higher for those in their thirties, forties, fifties, and sixties. The biggest cost increase occurs for those over the age of 60, with rates up to three times higher than for those in their 20s.
According to an article at TheStreet.com,
“After age 50, premiums rise tremendously. At age 53 the average premium is more than double the base rate, and by 55 the average premium is $446. At age 60, the average premium is $543. If a person is 64 years old, the average health insurance premium is $600 – 3 full times what it is at 21.”
Geographic Location
Location affects the price of the premiums and is based on the number of available healthcare options in a particular area or region. While in populated areas the competition can be greater, many rural parts of the state may only have fewer insurance options, which increases the costs for those residents.
Plan Tier
Plans are broken down by metal tiers. Each category has different premiums based on what percentage of overall healthcare costs they cover. Keep in mind, too, that the monthly premium is also determined by the particular plan’s deductibles, copays, coinsurance, and number of family members on the plan.
Because of these factors, as well as whether a plan is for an individual, a couple, or a family, it is not possible to provide actual costs prior to applying for and enrolling in a particular healthcare plan. However, a good estimate can be had by considering the state’s average monthly premium costs.
Metal Tier Avg Monthly Premium (2020)
- Bronze: $200.3 per person
- Silver: $288.87 per person
- Gold: $345.39 per person
- Platinum: $465.63 per person
Your Local Health Insurance Coverage Experts
Health insurance in California can be costly, but there are a variety of options that can help keep those costs to a minimum. Ultimately, the goal is to provide quality medical protection for you and your family.
J.C. Lewis Insurance Services offers a variety of affordable and flexible options that allow individuals and business owners to choose health insurance coverage options suited to their specific needs.
We are a family-owned and operated California health insurance agent located in Sonoma County. We are licensed to do business in California, and we specialize in medical insurance plans for small businesses, as well as for individuals and families and people with Medicare.
At J.C. Lewis Insurance Services, we can tailor our recommendations to your particular needs since we are licensed with most major carriers in California. You save time and money, and we can quickly define your insurance needs and recommend the best products and prices to meet those needs.
