Health insurance premiums have been putting an increasing crimp on family savings. During the past 10 years, premiums have risen faster than inflation and faster than wages, according to research from the Kaiser Family Foundation. It's understandable, then, that many people are nervous about purchasing health insurance for themselves and their own families.
Average Premium Costs
Overall, the average annual premium for individual insurance for those between 18 and 34 was $2,630 per year. The average cost of an individual plan for all ages was $3,606 per year for stand-alone policies, and $7,102 for family policies, according to a 2010 survey by the Kaiser Family Foundation.
Out-of-pocket Costs
Besides paying more for health insurance premiums, those participating in the survey report paying an additional $1,690 in deductibles, co-pays and other charges during the preceding 12 months. Fourteen percent of of respondents report spending nothing out of pocket, however, while 2 percent report spending more than $10,000 of their own money during the preceding year.
Factors Influencing Health Insurance Costs
Health insurance premium costs can vary based on health conditions, locations and other factors. For example, health insurers charge people with preexisting conditions more, and frequently charge residents of some ZIP codes more on the basis of the claims filed in that area. Some states mandate more expansive coverage than others, which also tends to increase health insurance premiums.
Reduce Your Costs
You can keep your healthcare premiums low by selecting a plan with a higher deductible, giving up smoking, electing a higher copay and dropping some kinds of optional coverages, such as maternity coverage, if your state doesn't mandate it and you are not planning on having a child. Before you change your coverage, though, think through what the affect on your family might be if you simultaneously had a major medical event costing $100,000 or more and a reduction in your work hours. A higher deductible might not make much of a difference in that situation, but changing from 0 percent coinsurance to 80 percent coinsurance would leave you with a $20,000 liability. If you cannot afford this cost, keep the lower coinsurance amount, even with a somewhat higher premium.
