The Cost of Health Insurance for Young Families in the United States

By Stephen F Hightower MD FACP

“It is health that is real wealth and not pieces of gold and silver” Mahatma Gandhi

fixingushealthcare.com

Sunday, January 12, 2025

Dear Mr. President, Honorable Members of Congress, Distinguished Staff and Fine Citizens,

It is a tremendous challenge to obtain healthcare for individuals or families who are not offered health benefits through their work, or who do not qualify for Medicare or Medicaid, and yet who need health care. Evaluating health care insurance options can be challenging ꟷ to understand all of the programs, benefits, risks, and costs, which occur with each of the multiple separate plans provided by multiple health care providers. The number of different health care providers offering these multiple health plans also creates challenges through the use of insurance jargon and nomenclature that may not be universal with all health groups.  Thus, multiple health plans provided by numerous carriers creates a significant challenge in identifying the best coverage and benefits for the least cost.  Currently, the identified average cost of Family Health Insurance for a family of 4 reported on Dec 4th, 2024 by e-Health was $23,968 per year. (See below to see how you can calculate your average cost and markedly reduce that cost.)  

Though there are multiple healthcare programs that try to assist families obtain health care coverage,  the coverage is not necessarily easily accessed, inexpensive, nor is it always able to provide the extent of coverage needed for certain unique family situations. For instance, only a very few provide any type of medication coverage. Family health insurance premiums have consistently risen with the annual premium for a family of four having increased by 22% over the last five years.

The major economic factors driving health insurance premiums have been advances in medical technology and the increased price of medical services, while Inflation and regulatory changes are also playing a role.

Other factors which can impact the average cost of family health insurance include:  coverage options, age of family members, geographical location, and number of family members covered.

Considering the types of family health insurance coverage, these are typically divided into Health Maintenance Organizations; 2) Exclusive Provider Organizations; 3); Point of Service plans; and 4) Preferred Provider Organizations. 

1. Health Maintenance Organizations (HMO): have lower premiums and require you select a Primary Care Physician (PCP). Specialists are in the network.

2. Exclusive Provider Organizations (EPO): have low premiums, you see your PCP but you do not have to have referrals to see an in-network specialist.

3. Point of Service plans POS) are more flexible and more costly. You select your PCP, obtain referrals independently, and can go outside of the network but will pay some of the extra cost.

4. Preferred Provider Organizations (PPO): are the most expensive program with a broader range of participating providers, no referral needed to see a specialist, and you pay a portion of expenses for covered outside expenses.

Coverage Levels significantly impact premiums:

• Bronze: insurer pays 60% of cost of care and individual pays 40%

• Silver: insurer pays 70% of the cost of care and enrollee pay 30%

• Gold: insurer pays 80% of cost of care and enrollee pays 20%

• Platinum: insurer pay 90% and enrollee pays 10%

Age and health of family members matter.  Insurance Companies use age (older equals higher premiums; general health and preexisting conditions determine costs; and existing significant medical problems promote higher out of pocket cost.

Geographic location matters.  Health care costs can significantly differ based on the state or region as they are influenced by, local cost of living, specific state health regulations, and level of competition among insurers.

Calculating family health insurance costs can be daunting. Online tools are available to assist:

• Healthcare.gov Plan Finder Tool: helps compare plans based on your specific needs including calculating out-of-pocket costs.

• Kaiser Family Foundation’s Health Insurance Cost Calculator: offers detailed insights into your potential expenses taking into count regional cost variations and family size.

Factors to include in Your Calculations:

• Premiums, the amount you pay monthly for your health insurance coverage

• Deductibles: the amount you must pay out-of-pocket before your insurance starts to    cover its share of your health care costs.

• Co-pays and Co-insurance: these are the amounts you pay for each medical service or    prescription. Co-pays are fixed amounts, while co-insurance is a percentage of the total    cost of the service.

• Out-of-Pocket maximums: this is the maximum amount you will have to pay in a year for covered services. Once you reach this limit, the insurance plan pays 100% of covered       services.  The meter will start running again at the onset of the new year. (it is crucial to know this cap, as it can significantly affect your financial risk)

Understanding these factors and using the available online tools, you can arrive at a picture of your family’s health needs, the affordability of insurance coverage and the implications/consequences of accessing care. 

        For completeness (but beyond the scope of this discussion), there are other opportunities for saving on family health insurance costs which include; Children’s Health Insurance Program (CHIP); Medicaid (can cover nursing home care and personal care services); Affordable Care Act subsidies; Health Savings Accounts; pairing a High Deductible Plan with a Health Savings Account; participating in Wellness Programs and Preventative Care; and marshaling Advanced Premium Tax Credits. 

With these suggestions we sincerely hope you will not be among those whose average cost of health Insurance for a family of four was $23,968 in 2024. 

Respectfully submitted,

Stephen F Hightower MD FACP

Rio Rancho

fixingushealthcare.com

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