The Cost of Health Insurance in the USA

The USA has the most expensive healthcare in the world. A consultation with a doctor can cost between $200 and $300. A study shows the average cost of a visit to the ER is $2,168 and the cost of an ambulance can range between $400 to $1,200. Hospital stays cost around $3,000 per day on average. Data shows that, on average, an individual in the USA will have around $12,500 per year of healthcare costs.

The US government has a few public health insurance programmes in place, but they only cover certain demographics. For example, Medicare covers US nationals aged over 65 and Medicaid provides support for people who have limited income. But these programmes do not extend to the whole population.

It’s for this reason that most people in the USA have international healthcare insurance, to cover the costs of medical expenses. Health insurance in the USA is not mandatory but it is recommended, to save people paying out of pocket for expensive medical treatments. Many employers will include health insurance coverage as part of their benefits package for employees, but others will have to cover their own health insurance costs.

How much does health insurance cost in the USA?

Recent research shows that the average health insurance cost for an individual is $7,739 a year. For a family, this rises to $22,221 per year. These costs increased 4% between 2020 and 2021. The average price for a family plan has increased 47% since 2011.

There are a range of factors that can affect how much health insurance in the USA costs, including which state the individual is in. In West Virginia, has the highest average cost by state at $9,972 per year. Georgia has the cheapest average annual cost at $3,708. New York costs, on average, $8,556 and California costs an average of $6,444 per year.

What factors impact how much health insurance in the USA costs?

There are many different factors that can affect how much you pay for healthcare insurance in the USA. These include:

  • Age – how old an individual is will affect their health insurance costs. Children up to 14 years old will typically cost a flat rate, but rates will usually increase every year after that.
  • Location – health insurance companies will assess the cost of your coverage based on where you live. Cities are often cheaper than remote, rural locations. State laws can also affect how much health insurance costs, by encouraging or discouraging competition between providers, or setting maximum increase rates.
  • Smoking – people who smoke will often pay a lot more for their health insurance, sometimes up to 50% higher than non-smokers. However, some states don’t allow rates to differ by tobacco use.
  • Number of people on the plan – some providers allow multiple people to be covered by one plan, for example, a plan could cover two adults and two children in a family. The more people that are on the plan, the higher the monthly costs will be.
  • Plan type – there are a few different types of health insurance plans in the USA, including PPO (preferred provider organisation, HMO (health maintenance organisation), EPOs (exclusive provider organisation) and Point of Service (POS). HMOs are usually the cheapest option of these.
  • Plan Tier – Most health insurance plans are divided into tiers, with more or less healthcare covered by the plan depending on which tier the individual is in. The top tiers will be the most expensive but will provide the most comprehensive coverage.

What does USA health insurance cover?

Before the Affordable Health Care Act (also known as Obamacare), health insurance benefits could vary considerably between each plan. Now there is a level of standardization that sets out the below “essential health benefits” included in every plan:

  • Emergency services
  • Hospitalisation, including surgery and overnight stays
  • Prescription medication
  • Pregnancy, maternity and newborn care
  • Mental health and substance disorder services
  • Rehabilitative and habilitative services and devices
  • Outpatient care
  • Laboratory services
  • Preventative and wellness services
  • Pediatric services, including oral and vision care

Additional benefits that are mandatory in every plan are birth control and breastfeeding coverage.

These are the minimum benefits that all health insurance plans in the USA must provide. Plans may also offer additional benefits, such as dental care and vision coverage. On a side note, if you’re planning on visiting the USA for an extended period of time and are travelling by car, consider getting USA car hire excess insurance to dodge any unwanted travel hiccups!

Does health insurance in the USA cover all the costs for medical expenses?

Many health insurance plans in the USA will require the individual to pay a certain amount for their treatment, and then they will cover the rest.

Policies will include an “annual deductible”, which is the amount the individual will pay each year towards their own medical costs before the insurance provider covers their part. Policies may also include a “copay” amount, which will be a fixed fee that must be paid upfront anytime the individual receives medical care or treatment that qualifies for copay. For example, the individual may have to pay $30 for a doctor’s consultation, but the rest will be covered by the insurance provider.

The individual may have to pay the total cost for treatment and care that isn’t covered by their policy. For example, if their policy does not include dental care, the individual will have to pay for any visits to the dentist, plus any treatment received, from their own pocket.

Studies show that around 42% of people in the USA are underinsured, meaning their health insurance plans are not extensive enough for their needs and their healthcare costs are taking up between 5% and 10% of their annual income.

For expats in the USA, Expatriate Group provides extensive international health insurance to ensure you’re protected from expensive medical costs. Get a quote for your health insurance today.   

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