When looking for the best health insurance plan, you should compare quotes based on four different factors: the plan benefits, coverage levels (also called plan tiers), provider networks (PPO, EPO, HMO and POS) and the type of policy.
Getting a personalized quote is important because rates can change widely based on age, location and other factors. For example, a 60-year-old typically pays more than twice as much as a 30-year-old. And choosing a cheap health insurance company can save you more than $100 per month for the same level of benefits.
Comparing the basics of your health insurance quote
All marketplace health insurance policies will have three costs to compare: monthly premium, deductible and out-of-pocket maximum. These three basic terms will tell you how much you'll pay for a plan and how much you'll pay for medical care.
The premium is the monthly price of a health insurance plan. In other words, it's the monthly bill from your insurance company. When comparing health insurance plans, start by considering what's affordable based on your income.
The deductible is the amount of medical care you must pay for before your plan's full benefits kick in. After your spending reaches the plan's deductible amount, you'll pay a portion of your medical costs. This is called either the coinsurance, which is a percentage of the bill, or a copay, which is a flat rate for a service, such as $25 per doctor visit.
For example, you could pay the full cost of an X-ray before you reach the deductible. Some services, such as preventive care, are excluded from a plan's deductible, but typically, your medical care is more expensive at the beginning of the policy year before your spending reaches the deductible.
The out-of-pocket maximum is the limit on how much you could spend on medical care in a year, after which the insurance company pays for the full cost of covered health services. The out-of-pocket maximum protects you from very high costs if you need expensive or ongoing medical care, such as cancer treatment or pregnancy care.
Remember that the calculations are based on medical spending. This means what you spend toward your deductible, as well as copayments and coinsurance, will count toward reaching your out-of-pocket maximum. However, the monthly bills you pay for the insurance plan are not included.
Both the out-of-pocket maximum and deductible are essential to consider when deciding if a plan is affordable.
Since you are responsible for nearly all expenses before the deductible, only choose a high-deductible plan if you're able to cover a large unexpected bill. For example, if your health insurance plan has a $3,500 deductible, you could have to pay a full $3,000 bill after going to the ER.
You should try to predict your medical expenses for the next year and choose a health insurance plan that will provide you with the most benefits possible combined with a deductible that you could afford to reach.
How to compare metal tiers of health insurance
Coverage tiers can help you understand how your health insurance quote compares to the level of medical benefits you get.
In most state health insurance exchanges, there are five coverage levels available: Catastrophic, Bronze, Silver, Gold and Platinum. These can help you figure out which quote is best for your current health and financial situation.
Catastrophic and Bronze health plans have the cheapest monthly costs, but you'll pay a larger portion of your medical expenses because plans have high deductibles and out-of-pocket maximums. For this reason, Bronze and Catastrophic plans are best for people in great health who do not expect to have large medical expenses during the year. Keep in mind that Catastrophic plans are not eligible for subsidies, so they may be more expensive than Bronze.
Silver tier plans are middle-ground policies with modest rates and deductibles. These plans are best for people or families with average health insurance needs and household income. Plus, if you have a low income,
Silver health insurance plans are eligible for cost-sharing reductions so you can pay less in coinsurance, copays and deductibles.
Gold and Platinum health insurance plans have the most expensive rates but the lowest deductibles available on the federal marketplace. When comparing these health insurance policies to those in other tiers, consider your household's potential health needs in the upcoming year. If you expect a large number of medical expenses, like prescription drugs or surgeries, choosing a Gold or Platinum plan with a low deductible could be a cost-effective and cheaper option, despite the higher monthly cost.
How to compare health insurance networks
The plan's type of network affects which doctors you can use, the flexibility of your coverage and how easy it is to see a specialist.
PPOs and HMOs are the two most popular options. PPOs are more expensive but give you more flexibility about where you can get medical care. HMOs are cheaper, but you only have coverage to see an in-network doctor. With an HMO, you'll also need a referral before seeing a specialist, making it inconvenient if you frequently see specialists.
Every type of health insurance network has access to groups of doctors and providers. When choosing a plan, it's important to check that your preferred doctors and medical facilities are in the network because going out of network can either cost more or not be covered. For example, if you currently visit a specialist, make sure the plan that you buy would cover that doctor.
Compare private health insurance to short-term plans
Private health insurance is another way of describing an individual or family health insurance plan that's sold by a private insurance company.
A private health insurance plan is best for those who don't have other coverage through an employer or government program such as Medicaid or Medicare.
These plans cover both essential health services and prescription drugs, and policies have the same cost structures as an employer plan, with a deductible, copays and an out-of-pocket maximum to cap your medical expenses. You can buy plans through the government marketplace, directly from an insurance company or from a broker or agent.
Short-term plans are cheap, usually between $100 and $300 per month, but benefits can exclude some types of care or may not kick in until after you've met a high deductible. For example, some plans could have deductibles as high as $5,000 or $10,000 before the policy would start paying for your care. Other policies may not cover pregnancy, mental health or prescriptions.
Because these policies typically have less coverage, you should only consider short-term plans as an option if you miss open enrollment or need health insurance while you're between jobs.
Frequently asked questions
How much does individual health insurance cost?
Health insurance costs $584 per month, on average, for an adult in the United States. However, the cost of plans will vary depending on your age, location and the level of coverage you choose.
What are the cheapest health insurance quotes I can get?
The most affordable health insurance is Medicaid, but to qualify, you must have a low income of less than about $20,000 per year for an individual, in most states. Income limits to qualify for Medicaid depend on where you live. If you don't qualify, you can choose the cheapest health insurer in your state, which could save you more than $100 per month compared to typical rates.
What are the best health insurance companies?
The overall best health insurance companies are Kaiser Permanente and Blue Cross Blue Shield. However, health insurance plans vary widely, making it important to compare plan options based on your location, age, preferred doctors and medical needs.
Medicaid covers children's dental care, and where you live determines if Medicaid covers dental care for adults and which dental services...
Sources and methodology
The average cost of health insurance uses 2024 quotes for a 40-year-old individual sourced from public use files (PUFs) on the Centers for Medicare & Medicaid Services (CMS) government website and state marketplaces. Plans and providers for which county-level data was included in the CMS Crosswalk file were used in the rate analysis; those excluded from this data set may not be considered.