How Much Does Health Insurance Cost In 2023?

How much does health insurance cost? Across the United States, Americans pay wildly different premiums monthly for medical coverage. Though these premiums are not determined by gender or pre-existing health conditions thanks to the Affordable Care Act, a number of other factors impact what you pay. We explore those factors below to help you understand how much you might pay for health insurance and why.


  • Many factors contribute to the price of health insurance premiums, including state and federal laws, where you live, whether you get insurance through your employer, and which type of plan you choose.
  • In 2022, annual premiums for health coverage for a family of four averaged $22,463, but employers picked up 73% of that cost.
  • The rise in employer health costs may be one reason wages haven’t risen much over the past two decades.
  • Deductibles can vary according to the size of the firm you work for or the type of plan you buy on a federal or state government exchange.

10 Factors That Affect Premiums

Many factors that affect how much you pay for health insurance are not within your control. Nonetheless, it’s good to have an understanding of what they are. Here are 10 key factors that affect how much health insurance premiums cost.

  1. State and federal laws. Legislation dictates what health insurance must cover and how much insurers can charge.
  2. Type of insurance. Whether you are insured by an employer’s group plan or buy it on your own is a factor in how much you’ll pay.
  3. Income level. Low-wage workers tend to pay more through employers but may pay less through a federal or state exchange due to subsidies.
  4. Employer size. Insurance is usually cheaper at large companies.
  5. State of residence. Premium prices vary depending on the state and county.
  6. Type of community. Premiums tend to be lower in urban areas than rural ones.
  7. County of residence. Some counties have just one plan, while others have more competition, which can help reduce prices.
  8. Plan type. Preferred provider organizations (PPOs) and platinum plans through the federal Health Insurance Marketplace tend to cost the most.
  9. Age. Health insurance rates go up as a policyholder gets older, with the largest increases after age 55. 
  10. Tobacco use. Premiums for tobacco users cost up to 50% more.

The coverage offered by employers contributes to several of the biggest factors that determine how much your coverage costs and how comprehensive it is. Let’s take a closer look.

Employee Health Insurance Premiums

If you’re fortunate enough to work for a company that provides health insurance, it might cost as much as a new car, according to the 2022 Employer Health Benefits Survey from the Kaiser Family Foundation. Kaiser found that average annual premiums for family coverage were $22,463 in 2022.2

Workers contributed an average of $6,106 toward the annual cost, which means employers picked up about 73% of the premium bill. For a single worker in 2022, the average premium was $7,911. Of that, workers paid $1,327, or 17%.

Kaiser included health maintenance organizations (HMOs), PPOs, point-of-service plans (PPOs), and high-deductible health plans with savings options (HDHP/SOs) in arriving at the average premium figures. It found that PPOs were the most common plan type, insuring 49% of covered employees. HDHP/SOs covered 29% of insured workers.

Average Employee Premiums in 2022
Employee Share FamilyIndividual
Per Year$6,106$1,327
Per Month$509$111

Of course, whatever employers spend on their workers’ health insurance leaves less money for wages and salaries. So workers are actually shouldering more of their premiums than these numbers show. In fact, one reason wages may not have risen much over the past two decades is because health costs have risen so much.

At the same time, because employees get to pay health insurance premiums with pretax dollars, their burden can be less than that of people who buy their own insurance through the federal Health Insurance Marketplace or their state’s health insurance exchange. (For the purposes of this article, “marketplace” and “exchange” are synonyms.)

Which type of plan employees choose affects their premiums, deductibles, choice of healthcare providers and hospitals, and whether they can have a health savings account (HSA), among many choices.

For families in which both spouses are offered employer health insurance, a careful comparison is critical—one plan may be a much better deal than another. The partner whose plan is not used can pocket the part of their paycheck that isn’t withheld for medical coverage. Or a couple with no children may decide that each should opt for their own company’s plan as individuals (coverage for couples rarely involves any sort of discount—it’s basically just a doubling of the individual rates).

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