How Much Does Health Insurance Cost?
How much does individual health insurance cost? The answer to that is dependent on many factors. One way to get a benchmark idea of how much you’ll pay for health insurance is by looking at the federal poverty level.
If you are paying for health insurance as an individual, how much you’ll spend on health insurance will be determined by your annual income. How far above the federal poverty line your income is will determine what percentage of your income you will pay towards health insurance.
What is the Federal Poverty Level?
The federal poverty level (FPL) is established by the federal government and measures poverty in the United States. The level of poverty is determined by the minimum gross income a family needs for food, shelter, clothing, transportation, and other basic needs. The FPL was established to determine an individual or family’s eligibility for assistance programs.
For the health insurance marketplace, this assistance is called a subsidy. 9 out of 10 people qualify for some assistance on the health insurance marketplace, making health insurance more affordable than most people realize.
If an individual qualifies for a subsidy, then they will receive assistance to pay for their monthly premium on health insurance. The chart below shows the percentage of the federal poverty level (FPL) along with the percentage of the household income that is paid for a silver health insurance plan. We will also include an FPL calculator to get an FPL estimated percentage of your income. If a family opts for a bronze plan over a silver plan, they will pay much less than the percentages below.
|% of FPL||What % of household income is paid for the benchmark silver plan|
|150-200||0% – 2.0%|
|200-250||2.0% – 4.0%|
|250-300||4.0% – 6.0%|
|300-400||6.0% – 8.5%|
What incomes qualify for savings?
Here at Compass Insurance Advisors, we have seen that 8 or 9 people out of 10 will qualify for some assistance. More people than ever qualify for health insurance due to the American Rescue Plan Act that President Biden passed in March 2021. Before the American Rescue Plan Act (ARPA) went into effect, people stopped receiving subsidies at 400% of the FPL. However, with the current legislation, instead of receiving subsidies at a fixed income amount, individuals will now not pay more than 8.5% of their income for health insurance. If someone chooses a bronze plan, then their monthly premiums will be even lower than 8.5% of their income. This chart shows the income that falls at 100% and at 400% of the FPL.
|Household size||100% of Federal Poverty level (2021)||400% of Federal Poverty level (2021)|
How Much Does Health Insurance Cost?
Here is an example of how much health insurance may cost for an individual. If a single person earns $32,000 for the year, their FPL is 235%. According to the chart above, this means that their cost for a silver plan will be 2-4% of their income. That would result in a monthly payment of $53-$106. If the person chooses a bronze plan, they could pay significantly less than this.
How Do I Qualify For Savings?
Talk to your insurance agent if you have questions about whether your income qualifies for subsidies. Because of the constant changes that occur in the insurance world, we encourage everyone to work with an agent to receive professional guidance when purchasing health insurance. Our insurance agents keep you up to date about all the changes happening now and in the future.
Now that you have been informed about the federal poverty level, it is also important to know that the ARPA bill might be temporary and will be effective up to the end of 2022, and therefore the subsidy is subject to change.
We understand that enrolling in health care insurance sounds tedious but with the help of your agent, the process should be easy and all taken care of for you. Call Compass Insurance Advisors, to get free advice about your insurance needs, (801) 901-3519.