Private Health Insurance for Individuals and Families
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Private health insurance means any plan that you buy directly from an insurance company.
Private health coverage includes policies you get from your employer and coverage you buy on your own, and a plan can cover one individual or a family. Private health insurance is best for those who don't qualify for government programs such as Medicaid or Medicare.
What is private health insurance?
Private health insurance, including individual and group coverage, comes directly from an insurance company rather than from the government.
Individual health insurance or family health insurance is a kind of private health coverage that you buy directly from a company or on a marketplace website. Private coverage can also be group coverage, which means your plan comes from your job.
Medical costs with health insurance
- Deductible: The amount you must pay in medical costs before the plan's benefits begin
- Copayments and coinsurance: The portion of your medical costs you pay
- Out-of-pocket maximum: The most you will pay for medical costs each year, after which the plan pays 100%
You can buy individual health insurance plans with a range of different coverage options and benefits. These plans cover one person. Family health insurance plans work the same way as individual plans, except that they cover multiple people. This usually increases the deductible, out-of-pocket maximums and monthly cost for coverage.
If you have a family health insurance plan, you should know that children can only stay on the policy until age 26. As you or your child nears that age, you may want to start shopping for individual health insurance.
How much is private health insurance?
The average cost of individual health insurance is currently $560 per month.
The average monthly cost is based on a 40-year-old with a Silver-level plan purchased on a marketplace site. However, your health insurance premium will vary depending on the state you live in, your age and the amount of coverage that you buy.
Find Cheap Health Insurance in Your Area
For example, 60-year-olds pay nearly three times more for individual health insurance compared to 20-year-olds with the same level of coverage.
And age isn't the only factor that affects the cost of health insurance; the state you live in has a big impact, too. In Wyoming, the average cost of a Silver policy is $882 per month for a 40-year-old. In New Hampshire, the same plan costs an average of $372 per month.
Individual health insurance rates by age
Age | Average rate* |
|---|---|
| 20 | $425 |
| 30 | $497 |
| 40 | $560 |
| 50 | $782 |
| 60 | $1,189 |
*Average monthly rate for a Silver plan
The insurance company you choose can also affect how much you pay for coverage and the experience you have with your policy. There are pros and cons to most companies. Some shoppers might choose the cheapest rate possible, while others choose to pay more for an individual or family health insurance plan with better service. This might help reduce the stress when you file a claim.
Health insurance discounts
If you have a low income and shop for coverage on HealthCare.gov or your state marketplace, you may qualify for two programs to reduce your costs.
Subsidies, also called premium tax credits, can help reduce the monthly cost of a health insurance plan based on your annual income. Subsidies help those with lower incomes pay less for coverage. This discount is available for all plan tiers except Catastrophic.
Cost-sharing reductions (CSRs) are only available for Silver plans and can reduce how much you pay for medical care. CSRs lower your plan's deductible, copayments and out-of-pocket maximum.
How to buy private health insurance
If you have private health insurance through your job, you'll likely pay your monthly rate as a paycheck deduction. If you don't get health insurance through an employer, there are four ways you can buy a family or individual health insurance policy.
- Shop online to compare rates: Getting quotes from an online comparison site is an easy way to see what plans are offered in your area and to compare policies from multiple private health insurance companies.
- Buy directly from an insurance company: If you already know what companies you're interested in, you can get quotes directly and compare the options yourself. There are no discounts for buying direct.
- Choose a marketplace plan: HealthCare.gov allows people in most states to compare private health insurance plans from multiple companies, although some states use their own marketplace sites. There are limitations on when you can enroll, and you can only purchase a plan during fall open enrollment or if you qualify for a special enrollment period, like moving to a new state or losing your previous coverage. Shoppers who have low to moderate incomes may qualify for discounted health insurance because of the premium tax credit program.
- Shop through an insurance agent: If you have an agent for other types of insurance, they may also be able to help you choose the best private health insurance policy.
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Shop health insurance by state
The most popular health insurance company in your state could be a good place to start looking for coverage. If you get quotes from more than one company, you can compare rates, coverage and customer service reviews.
State | Most popular individual insurer |
|---|---|
| Alabama | Blue Cross and Blue Shield of Alabama |
| Alaska | Premera Blue Cross |
| Arizona | Arizona Complete Health |
| Arkansas | Arkansas Blue Cross and Blue Shield |
| California | Blue Shield of California |
What's covered by a private insurance plan?
The Affordable Care Act (ACA) requires most insurance plans, including individual and family health insurance, to cover 10 essential health benefits:
- Hospitalization
- Emergency services
- Outpatient services, like urgent care visits
- Prescription drugs
- Preventive and wellness services
- Pediatric services
- Pregnancy, maternity and newborn care
- Mental health and substance abuse care
- Rehabilitative services
- Laboratory services
When you buy an individual health insurance or family health insurance policy, you will have coverage for at least these 10 types of health care.
For example, if you become pregnant and you have a private health insurance plan, your health insurance policy is required by law to cover your maternity care as well as care for your newborn. This includes pregnancy therapy and check-ins with your doctor, as well as the delivery in the hospital.
Coverage levels of private health insurance
Private health insurance policies are broken down into tier categories: Catastrophic, Bronze, Silver, Gold and Platinum.
Each tier covers your medical costs differently. Sometimes, the Bronze, Silver, Gold and Platinum categories are referred to as "metal tiers." The exception is the Catastrophic level, which isn't available in all states.
A lower-tier plan, like Catastrophic or Bronze, can help you keep your monthly bills low, but you pay more when you go to the doctor. A higher-tier plan, such as Gold or Platinum, covers more medical costs but has a higher monthly rate. These plans are a good choice for those who need ongoing or expensive medical care.
Plan tier | Monthly cost |
|---|---|
| Catastrophic | $332 |
| Bronze | $440 |
| Silver | $560 |
| Gold | $604 |
| Platinum | $737 |
Average cost for a 40-year-old
Every plan, regardless of tier, covers the same essential health services. Higher-tier plans cover a larger portion of your medical costs than lower-tier plans. When comparing plans, it can be helpful to estimate how much medical care you might need in the future. If you only need routine care, a Catastrophic or Bronze plan might work for you, but if you have more expensive health care needs, opt for a Silver, Gold or Platinum plan that will cover more of your medical costs.
Catastrophic and Bronze individual plans are good choices if you are young and healthy or if you only need basic medical care.
These individual health insurance plans are the most affordable health insurance policies with the lowest monthly rates. However, this means that the benefits aren't as robust as other options, and you pay more for your medical care.
If you have a major health issue or accident, Catastrophic and Bronze plans can protect you from devastating medical bills, but you'll still pay a bigger portion of your health care costs than if you had a higher-tier plan. Additionally, you can only enroll in a Catastrophic health insurance plan if you're under 30 years old or eligible for a financial hardship exemption.
Catastrophic plans aren't available in every state. Additionally, some states have an "Expanded Bronze" option that offers more benefits than Bronze plans.
Silver health insurance plans are the most popular option and have the best medical coverage for most people. They have moderate monthly rates, deductibles and out-of-pocket maximums. For this reason, a Silver plan provides financial stability in the event that you or a family member experiences a serious medical problem, but it can help you stick to your budget with an affordable monthly rate.
If you need low-income health insurance, a Silver plan could be a good option. Silver plans have a feature you can qualify for based on your income that lowers the deductible, copayment and coinsurance amounts. This is called a cost-sharing reduction, and it can make medical care more affordable.
Gold and Platinum health insurance plans have the highest monthly costs and the best benefits. You pay more each month with these options, but you pay less when you need medical care. Paying for this level of coverage is typically only worth it for older individuals or those who may have health conditions that require frequent care or costly prescription drugs.
Frequently asked questions
Can I buy health insurance on my own?
Yes, you can buy individual health insurance or family health insurance. These plans are a good choice for those who don't have a plan through an employer, Medicare or Medicaid. These plans are sold by private health insurance companies, and you can choose the level of coverage that works for your budget and medical needs.
Can I buy private health insurance at any time?
You can buy health insurance at any time when you buy directly from an insurance company or through a broker or agent. You can only buy a policy from the health insurance marketplace, HealthCare.gov, during the open enrollment period in the fall or if your situation qualifies you for a special enrollment period.
What’s the best private insurance company?
Kaiser Permanente is our pick for the best health insurance company for individuals and families, but it's only available in eight states. Blue Cross Blue Shield is a good company that is widely available. It generally has high customer satisfaction, and enrollees have access to a large network of medical providers.
Why is private health insurance so expensive?
The cost of health insurance is largely driven by how expensive medical care is. Plus, those who are buying private health insurance are paying the full cost of the policy. In contrast, those who get health insurance through their job split the policy cost with their employer.
What are the disadvantages of private health insurance?
Private health insurance plans can be expensive, and you also have to pay a portion of your medical costs. Plus, insurance plans have networks of doctors and medical facilities, making it important to stay within the plan's network to get the best deal. However, the advantages of health insurance usually outweigh its disadvantages. Health insurance, whether it's private or group, can help you avoid high medical expenses that can affect your financial health.
Sources and methodology
We used data from the Centers for Medicare & Medicaid Services (CMS) public use files (PUFs) and from state-run marketplace sites to determine the average health insurance rates for a 40-year-old individual. We calculated average rates for different ages based on age curve variations published by the CMS. Plans and providers for which county-level data was included in the CMS Crosswalk file were used in our analysis; those excluded from this data set may not appear.
The most popular health insurance company in each state is based on a Kaiser Family Foundation study of the largest health insurance companies.