What is a health insurance premium?
What a health insurance premium is
Think of an insurance premium like a monthly membership fee. Just like you pay a set fee to keep a gym membership or a streaming service active, you pay a monthly premium to keep your health coverage active.
You must pay this bill every month, even if you don’t go to the doctor or use any health services that month. Paying your premium ensures that your health plan is there when you need care.
The good news is your medical history doesn’t impact your premium price. A few other specific details can affect what you pay, though:
- Your age: Older people generally pay more for coverage than younger people.
- Where you live: Your premium will change based on your ZIP code.
- Tobacco use: If you use tobacco products, your monthly cost may be higher.
- Who’s covered by the plan: Individual plans cost less than family coverage.
- Your plan type: A plan that covers more of your costs will likely have a higher premium.
How you pay your monthly premium depends on how you get your coverage.
If you get health insurance through your employer, your company usually pays a large part of the premium. Your share of the cost is then taken right out of your paycheck.
If you buy your own health insurance plan directly from an insurer or through the Health Insurance Marketplace®, you will pay the monthly premium yourself. You simply send a payment directly to your insurance company every month.
The balancing act: Premiums, deductibles, and copays
Picking the best health plan for you
Choosing a health insurance plan is a big decision, and we know you want to protect your family and your budget. Understanding your costs is a smart place to start.
If you go to the doctor often or regularly take medications, a plan with a higher premium and a lower deductible might save you money over time. If you rarely get sick and just want coverage for emergencies, a plan with a lower premium could be your best choice. Take your time, look at your options, and find the plan that best fits your needs.
