IvoryscholarshipHow much does health insurance cost? The cost of health insurance in the USA is a major talking point for Americans and visitors alike – here, we explore the averages of health insurance costs and factors impacting policy fees. The USA’s healthcare system is unlike many others, so we look at why the cost of average American healthcare insurance seems to be rising and how other nations compare.
How much does average health insurance cost in the USA?
Health insurance means different things to people across the world – the USA’s system is known for several distinguishing features, including a high relative cost to the individual and a lack of universal coverage.
You may be wondering why the cost of healthcare insurance seems to be rising and how the picture compares to other nations. In a country that spends nearly US$4 trillion on healthcare yet finds coverage varies widely, there’s a lot to weigh up. “How much does health insurance cost?” is one of the most important questions to Americans.
Across the United States, Americans pay wildly different premiums monthly for health insurance. The average annual cost of health insurance in the USA is US$7,739 for an individual and US$22,221 for a family as of 2021, according to the Kaiser Family Foundation – a bill employers typically fund roughly three quarters of.
The cost to each person can vary a lot, however, based on factors such as age, geography, employer size and the type of plan they’re enrolled in. While 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.
Deductibles, also known as out-of-pocket fees, are a common feature in American health insurance policies, meaning upfront costs are common even for those who are insured. 83% of covered American workers have a general annual deductible that must be met before services are funded by their health plan and the average size of a deductible is US$1,644 for individuals. These fees tend to be higher in smaller firms.
Of course, not all companies offer health benefits to employees – 44% of firms did not offer insurance to staff in 2020.
For those without cover, as well as entrepreneurs and the self-employed, taking out private health insurance is a common route. The average cost of purchasing your own health insurance in this way is US$456 per month for unsubsidised individuals in the USA, according to a 2020 survey by eHealth.
What influences the cost of health insurance in the USA?
Americans and visitors alike often wonder why health costs are so high in the USA, a nation where per capita health spending is almost twice the average seen in other wealthy countries. The answer to this question is complex.
The American treatment cost gap and health insurance cost
The raw cost of treatment is higher in the USA than in many countries, so this influences the cost of insurance. There are several reasons for this cost gap:
- Pharmaceutical drugs, for instance, cost nearly four times more in the USA than other similar countries
- American doctors and nurses enjoy some of the world’s best pay – the average registered nurse in California earns US$113,240 – so this also drives up cost
- The American system also tends to favour more frequent interventions and complicated procedures, which comes with a price tag
Due to the sizeable treatment cost differences, many international insurers – including William Russell – do not cover treatments that take place on American soil as part of our standard policies.
However, if you’re an American citizen working overseas, then it’s good to know our health insurance comes has the option of short-term cover in the USA.
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