How Much Should You Pay For Family Health Insurance?

How Much Should You Pay For Family Health Insurance?

10/21/2022

Health insurance can save you many thousands of dollars on everything from preventative care to emergency surgery and hospital stays. While this type of insurance can save money in the long term, paying the monthly or annual premiums is understandably a major concern for most families, especially if they are purchasing health insurance on their own rather than through an employer. Here is a look at what you can expect to spend on family health insurance, and the factors that can influence the total cost of your premiums.

Average Costs for Family Health Insurance

family illustration

One of the first things to understand about family health insurance is that premiums, the monthly fees you pay for your healthcare coverage, can vary widely. However, these varying costs can be distilled into averages that may be helpful in your financial planning. Here are some of the most recent average costs for family healthcare:

Couple

$954

Couple with 1 child: 

$1,230 per year

Couple with 2 children: 

$1,506 per year

Couple with three children:

$1,782 per year

These averages are based on couples who are about 40 years of age who have children between the ages of 0 and 14. If you want a more accurate idea of the family health insurance cost for your family, consider these additional factors that can influence your premiums.

Factors Affecting the Cost of Family Health Insurance

checklist

Deductibles, Out-of-Pocket Limits, and Copays

In addition to your monthly premiums, you will be responsible for fees associated with each medical visit or procedure you undergo. How much your health insurance costs can depend upon how high these other fees are. Here is a look at each:

Deductible

The deductible is the amount of money you must pay for covered medical expenses before your health insurance coverage begins. For example, say your family has a deductible of $1,500. You would need to pay $1,500 in medical expenses before your health insurance would begin covering your costs.

Co-pays

Once your deductible is met, you may still owe a small fee for certain medical visits or procedures. For example, you may owe $30 for each visit to your primary care physician. Your health insurance will cover the remainder of the fees for these visits.

Out-of-Pocket Expenses

Out-of-pocket (OOP) expenses are the total healthcare costs you can be required to pay in a single year. All of your deductibles and copays count toward your OOP expenses. For example, if your family health insurance plan caps OOP expenses at $7,000, your health insurance will cover all of your healthcare expenses, including all of your copays, after you spend $7,000 on healthcare for the year.

In general, the higher your deductibles, copays, and out-of-pocket expenses are, the lower your premium will be. For example, plans with low or zero deductibles will cost much more per month than plans with high deductibles (Defined as plans in which the deductible is at least $2,800 for the family).

Balancing these costs will be an important part of your decision-making process when choosing family health insurance. Some families who are generally healthy and rarely require medical care for injury or illness may benefit from paying low premiums for a high-deductible healthcare plan.

However, families who have one or more members who face healthcare issues that require frequent medical appointments may save money by paying more for monthly premiums in order to have a lower deductible.

Age

Age can also play a role in your family health insurance premiums. In general, the older the individuals covered by the plan are, the higher the premiums. For example, a couple in their 20s with children may pay less for their health insurance than a couple in their 60s. Annual premiums may also increase once children are at least 15 years of age. The exact costs of health insurance, then, will depend in part upon the age of each of your covered family members.

Type of Health Insurance

medical prfoessional

Not every family health insurance plan is the same. There are several types of health insurance plan, and premiums will vary from type to type. Here is a look at some of the most common types of health insurance.

HMO

Health maintenance organization (HMO) plans only allow you access to a specific network of providers. If you receive medical care outside this network, your expenses may not be covered. In addition, HMOs often require you to receive a referral for specialist visits. Their premiums tend to be low.

EPO

An exclusive provider organization plan (EPO) also limits your choice of providers to a specific network. However, you may not always need a referral to a specialist. Their premiums are usually slightly higher than those associated with HMO plans.

PPO

Preferred provider organization (PPO) plans offer more choice in the provider you see. While you receive the most coverage for using in-network providers, you can still receive some coverage when you go out of network. You often do not need a referral to see a specialist. These plans often have higher premiums than HMO and EPO plans.

Health Insurance Tier

agent explaining to a couple

Another major factor in the cost of your family healthcare plan is the tier you choose. Many health insurance policies allow you to choose certain levels of coverage. Each level comes with its own premiums you must pay. The higher the tier you choose, the higher the premium, but the more benefits you receive with the plan. The most common tiers are bronze, silver, gold, and platinum, with bronze being the basic (and inexpensive) plan and platinum being the most benefit-rich (and most costly) plan.

If navigating the ins and outs of family health insurance feels overwhelming, contact SafeGuard Insurance Agency today. Our experienced agents will work with you to help you find the quotes and the policies that fit your family. Protect your health and your family’s health with insurance that works for your needs, and your budget!

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