Private Health Insurance for Individuals and Families
Private health insurance is any plan from an insurance company and not the government.
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Most people get private insurance through their job, but you can also purchase plans directly from an insurance company.
If you don't have access to health insurance through your workplace, and you don't qualify for government programs like Medicare and Medicaid, you can also consider a private plan from HealthCare.gov or your state health exchange. Plans can cover one person or a family.
What is private health insurance?
Private health insurance, including individual and group coverage, comes directly from an insurance company instead of 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 coverage through your job, which is also called group coverage.
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. Family plans usually have higher monthly costs for coverage, deductibles and out-of-pocket maximums.
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%
How much is private health insurance?
The average cost of individual health insurance through the government marketplace is $584 per month.
The average monthly cost is for a 40-year-old with a Silver-level plan bought on a marketplace site. However, your monthly rate will vary depending on your age, where you live and the amount of coverage that you buy. You'll likely pay a lower rate if you get insurance through your workplace since employers typically subsidize group health insurance.
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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.
Keep in mind that at age 65 you automatically qualify for Medicare, a type of low-cost government health insurance. That means you don't have to worry about very expensive health insurance rates in retirement.
Where you live also has a big impact on how much you'll pay for health insurance. In Alaska, the average cost of a Silver policy is $948 per month for a 40-year-old. In New Hampshire, Silver plans cost $373 per month for a 40-year-old on average.
Individual health insurance rates by age
Age | Average rate |
|---|---|
| 20 | $443 |
| 30 | $519 |
| 40 | $584 |
| 50 | $816 |
| 60 | $1,240 |
Average monthly rate for a Silver plan
The insurance company you choose also will likely 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 a health insurance plan with the cheapest rate possible, while others choose to pay more for an individual or family health insurance plan with better service.
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 discount programs to lower what you pay for health insurance.
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 lower how much you pay for medical care. CSRs help you cover the medical costs that you're responsible for paying.
How to buy private health insurance
If you have private health insurance through your job, you'll likely pay your monthly rate out of your paycheck. 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.
- 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 limits on when you can enroll. For example, normally you can only buy a plan during fall open enrollment. In some instances, like if you move or lose your current coverage, you may qualify to get a new plan immediately, which is called a special enrollment period. 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: Insurance agents can 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
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 plan tiers: Catastrophic, Bronze, Silver, Gold and Platinum.
Plan tiers have nothing to do with the services your plan covers. For example, a Platinum plan may cover the same services as a Bronze plan. Instead, plan tiers have to do with how you pay for insurance.
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 | $335 |
| Bronze | $462 |
| Silver | $584 |
| Gold | $641 |
| Platinum | $813 |
Average cost for a 40-year-old
Every plan, regardless of tier, covers the same essential health services. Higher-tier plans cover more 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 next year.
A Bronze or Silver plan is a good choice if you only need routine care. Consider a Gold or Platinum plan if you think you'll visit the doctor often over the coming year.
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 you pay more when you visit the doctor.
If you have a major health issue or accident, Catastrophic and Bronze plans can protect you from high 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. Some states also 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 middle-of-the-road monthly rates, deductibles and out-of-pocket maximums.
A Silver plan offers more financial stability in case you or a family member have a serious medical problem. It can also 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 if you don't have insurance through your employer or a government program like Medicare or Medicaid.
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 plan from your state's health insurance marketplace or HealthCare.gov, during the open enrollment period in the fall or if you qualify for a special enrollment period.
What’s the best private insurance company?
Kaiser Permanente has the best health insurance for individuals and families, but it's only available in eight states and Washington D.C.
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 doctors.
Why is private health insurance so expensive?
The cost of health insurance is largely driven by how expensive medical care is. Plus, you have to pay the full cost of the policy. By contrast, you only pay part of your health insurance costs when you have a group health plan through your 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.
Sources and methodology
Data for average rates is 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. Average rates were calculated 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.
Editorial note: The content of this article is based on the author's opinions and recommendations alone. It has not been previewed, commissioned or otherwise endorsed by any of our network partners.