Average Cost of Health Insurance

Average Cost of Health Insurance

The average monthly cost of health insurance keeps increasing and many consumers are getting hit hard in this economy. People often do not realize that the reason costs keep increasing is due to unfunded mandates from the state and federal governments. What that means is that the government requires a health insurance company to cover things such as pre existing medical conditions with either no waiting periods, or without the insurance company being able to rate up a potential policy holder to help offset the costs. Since health insurance, like all types of insurance, is a sharing of risk from a like minded group of people

Most people would agree, if not all of them, that health insurance is the most vital protection that everyone must have. But according to Families USA in 2009, in a study conducted by the Lewin group, a company owned by United Healthcare Insurance Company, 87.7 million Americans were uninsured in 2007 to 2008. Despite the economic and social development that the country has gone through in the past decades, health care still remains a dilemma.

The USA’s life expectancy ranked 50^th in the world, this is according to the Institute of Medicine of the United States National Academies. The insufficiency and lack of insurance coverage results to roughly around 8,000 unnecessary deaths every year. A Harvard study further tells of more than 44,800 deaths annually for the same reason.

On March 23, 2010, The Patient Protection and Affordable Car Act, sponsored by the Democratic 111^th Congress and the Obama Administration, became a law and made changes in health insurances procedures. The act is expected to drop the levels of uninsured people by 32 million, but will still leave 23 million residents uninsured by 2019 after the bill’s provisions have all taken effect.

Health insurance is primarily provided by the private sectors. But the government provides free health Insurance like Medicare and Medicaid for senior citizens 65 or older, people on disability and unemployment or has little or no income. For most people, health insurance is provided by their employers. And health insurance may also be bought individually for the self-employed or for people who are working for very small companies who do not provide health insurance.

The average health insurance cost mainly depends on the premium and the stated out-of-the-pocket expenses that the policy holder chooses to take. The premium is the amount paid to the insurance company for the service to be provided. The coverage and annual spending limit directly affect the premium that needs to be paid every month, or annually in some cases. Out-of-the-pocket expenses are the amount shouldered by the policy holder. In some cases, the insurance company will only be liable for a certain percentage of the medical bill. Some premiums will pay the whole bill in full. But in understanding that the amount of out-of-the-pocket expenses also directly affects the cost, you would have to pay more. This also includes deductibles or the amount that needs to be paid before the policy takes in effect, and co-payment which is the fixed and case-specific payment that needs to be paid for every medical service made.

A report published by America’s Health Insurance Plans in October 2009 (Individual Health Insurance of 2009: A Comprehensive Survey of Premiums, Availability and Benefits) stated the average cost of insurance plans when purchased personally. Note that the information provided is based on historical data. For as single person, an annual premium was $2,985 while a whole family paid $6,328. Premium also differs in a state-to-state basis. The family health plan in New York was $13,296 and the same plan in Iowa only cost $5609. The average cost was also affected directly by the deductible taken.

Average Cost Health Insurance