How much does Obamacare cost?

Average health insurance costs for employer-sponsored health insurance in 2017 was approximately $558 for individual coverage, with average monthly employee contributions of approximately $101, according to the Kaiser Family Foundation. But what about Americans who have to buy their own health insurance? Here’s how much Obamacare costs and what factors can increase or reduce how much you pay.

What counts as Obamacare?

When people say Obamacare insurance, they are typically referring to individual and family plans bought on the health insurance Marketplace created to help implement the Affordable Care Act. The ACA was created to expand healthcare access and reduce associated costs. All Obamacare plans include essential health benefits such as free preventive care and mental health services.

How much does Obamacare cost?

What Obamacare costs will depend on your age, location, household size, and income, as well as the type of health insurance plan you choose and whether you use tobacco. Here’s how each factor plays a role.

Health insurance companies are allowed to charge older people higher premiums than they do for younger individuals. This is capped at three times the premium for younger folks. They can also charge people who use tobacco up to 50 percent more.

Where you live can significantly impact the cost of your health insurance. This is due to varying levels of cost of living as well as differences in state and local laws. The amount of competition between insurance companies in each location also plays a role.

Lastly, the cost of your premium will depend on whether you’re enrolling in an individual or family plan, and whether you’re choosing a cheaper type of plan or one that covers more. The five types of health insurance plans are Catastrophic, Bronze, Silver, Gold, and Platinum. The first option is only available to those under 30 years old and those with certain exemptions. For the other four, Bronze plans typically have lower monthly premiums and higher out-of-pocket costs, and this balance shifts all the way up to Platinum plans, which typically have highest monthly premiums and lowest out-of-pocket costs.

States can put restrictions on how much each of these factors can impact your premium. But where you live, your gender, current health, and medical history cannot be taken into account to determine your Obamacare premiums.

Income comes into play when it interacts with your household size and location to determine whether you qualify for an ACA subsidy to reduce your Obamacare costs. The average monthly premium for 2018 benchmark Obamacare plans is $411 before subsidies, according to the U.S. Department of Health and Human Services. But thanks to these subsidies, a HealthSherpa study found that 18 percent of Obamacare enrollees pay nothing for coverage, while 26 percent have premiums that are less than $10 per month.

You’ll be eligible for subsidies if you make between 100 and 400 percent of the Federal Poverty Level. The two types of health insurance subsidies are premium tax credits and cost-sharing reductions. Location is important if your income is between 100 percent and 138 percent of the Federal Poverty Line. If you live in a state with expanded Medicaid, this usually means you’ll qualify for Medicaid and should apply for that instead of Obamacare. (If you qualify for Medicaid and choose to buy an Obamacare health insurance plan instead, you won’t be eligible for any subsidies.)

What are the total health care costs under Obamacare?

Health insurance premiums are just one part of total health care costs, whether you get an Obamacare plan or have employer-sponsored coverage. When choosing a plan, make sure to consider other factors such as health insurance deductibles, copayments, coinsurance, out-of-pocket maximums, and network coverage. Sometimes a plan with higher premium will actually cost less when you incorporate health care costs, especially if you can apply a subsidy.

Try to estimate what sort of medical services you’ll need, considering healthcare services you currently use, or anything you’ll need in the future. When you compare plans, you’ll be able to see premiums and health care prices associated with each and can use that information to calculate which plan is best for you.

HealthSherpa

HealthSherpa is a free website and team of real people who can help you find, enroll in, and make the best use of your marketplace health insurance.

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