How Much Is Private Health Insurance?

Want health insurance that guarantees protection? Private health insurance is what you need.

If your employer doesn’t provide you with health insurance as part of an employee benefits program, you may start considering to purchase your own health insurance through a private health insurance company. But, when your employer offers you the option to sign up for an employer-sponsored health insurance plan, they will normally cover part of your insurance premiums.

A premium is the amount of money an individual or business pays to an insurance company; health insurance premiums are typically paid monthly. If you need to insure yourself, you’ll be required to pay the full cost of the premiums. Due to this, it is normal to be worried about how much it will cost to purchase health insurance for yourself. However, there are different options and different prices available to you depending on the level of coverage you need. When purchasing your own insurance, the process is more complex than simply selecting a company plan and paying a premium every month.

This article will help guide you through the process of purchasing your own health insurance. This article explores private health insurance definition, the average cost of private health insurance and why is it worth buying private health insurance

Private health insurance definition

Private health insurance is the health insurance that isn’t advertised by government-run agencies. These health insurance plans can be purchased through private health insurance companies, health insurance agents, or online brokers like eHealth.

You might also come across a private health insurance plan referred to as an “off-exchange” plan, meaning it was not purchased on the federal health insurance marketplace, or on any of the state exchanges created under the Affordable Care Act (ACA).

Who gets private health insurance plans?

According to the Kaiser Family Foundation, 49% of Americans get hold of their health insurance through employer-sponsored insurance as a benefit. So if you’ve ever had insurance through your job, or through someone else’s job as a dependent, then you’ve possibly been signed up for private health insurance.

However, Private health insurance can not only be acquired through employer-sponsored group health insurance plans. Some people choose to buy individual health insurance directly from health insurance companies, local health insurance brokers, or online health insurance

marketplaces like eHealth.

Private health insurance coverage

Private health insurance cover comprises hospital cover, general treatment cover (also known as ancillary or extras cover), and ambulance cover. Ambulance cover may be available separately, combined with other policies, or in some cases is covered by your state government.

There are different types of cover that offer different benefits. Check with your health insurer to be sure of exactly what you are covered for.

How buying private health insurance works

Some Americans acquire insurance by joining in a group health insurance plan through their employers. Medicare and Medicaid also offer health care coverage to a population of Americans.

Medicare is a federal health insurance program for people who are 65 or older. Certain young people with disabilities and people with last-stage renal disease may also be eligible for Medicare. Medicaid is a public assistance healthcare program for low-income Americans irrespective of their age.

You cannot buy private health insurance directly from the state or federal government. If your company does not provide an employer-sponsored plan, and if you are not qualified for Medicare or Medicaid, individuals and families have the alternative of purchasing insurance policies from private insurance companies or through the Health Insurance Marketplace.

When you need private health insurance?

There are certain situations that make require you to purchase your own health insurance plan:

A Young Adult 26 Years of Age or Older

Under the conditions of the Affordable Care Act (ACA), young people can be covered as dependents by their parents’ health insurance policy until they turn 26 years old. After that, they must get their own insurance policy.


If you lose your job, you may be qualified to maintain coverage through your employer’s health insurance plan through a program called the Consolidated Omnibus Budget Reconciliation Act (COBRA). COBRA allows qualified employees and their dependents the option to maintain health insurance coverage when an employee loses their job or experiences a cut of work hours.

While coverage through COBRA can be maintained for up to 36 months (under certain

circumstances), the cost of enrolling in COBRA is very high. This is for the reason that the formerly employed person pays the full cost of the insurance. Typically, employers pay a fraction of healthcare premiums on behalf of their employees.

A Part-Time Employee

Part-time jobs hardly offer health benefits. A part-time job is any position that involves employees working a lower number of hours than would be deemed full-time by their employer, or 40 hours per week. If you work part-time, you must sign up for your own health insurance.


A self-employed person may work for themselves as a freelancer or own their own business. A self-employed person may be entitled for health insurance if they are married and can be insured through their spouse’s plan. If not, they must buy their own health insurance.

A Business Owner Who Has Employees

If you set up a business and you have employees, you might be obliged to offer them health

insurance. Even if it’s not needed, you might opt to offer health insurance in order to be a viable employer who can entice qualified job candidates. In this situation, you will be required to purchase a business health insurance plan, also known as a group plan.

If You Retire (or Your Spouse/Parent Retires)

When you retire, you will likely no longer be suitable for employer-sponsored health insurance.

If you are under 65 and not disabled, you will need to purchase individual private health insurance until you turn 65 and can apply for Medicare. Many retirees prefer to purchase private Medigap or Medicare Advantage plans in addition to Medicare as a way of ensuring more comprehensive coverage. Some retired people may also choose to completely replace Medicare coverage with private Medigap or Medicare Advantage plans.

It is crucial to take note of that Medicare, Medigap, and Medicare Advantage plans are only for the individual—your spouse, partner, and any dependents cannot be insured through your Medicare plan. This implies that if your family was previously insured through your employer’s plan, and you retire, your family members may need to buy a private insurance plan.

Dropped By Your Existing Insurer

Even Though the ACA precludes insurers from canceling your coverage–or denying you coverage due to a pre-existing condition or because you made an error in your application—there are other situations when your coverage may be canceled. It’s also possible that your insurance may become so pricey you can’t manage to pay for it.

Is it worth getting private health insurance?

If you get yourself in one of the aforementioned situations and lack health insurance coverage, it’s critical to enroll in an individual plan as soon as possible.

Starting with the 2019 plan year, there is no longer a fine for not having health insurance. For plan years through 2018, if you decided not to buy health insurance, you could encounter a fee when you filed your federal taxes. This fee was called the Individual Shared Responsibility Payment, but it is no longer active.

Even though you will not be charged a fee, you cannot foresee when an accident will happen that will require medical attention. Even a small broken bone can have adverse financial consequences if you’re uninsured. Without insurance, medical care can be ridiculously expensive.

If you purchase insurance through the Health Insurance Marketplace, you may be qualified for income-based premium tax credits or cost-sharing reductions. The Health Insurance Marketplace is a platform that offers insurance plans to individuals, families, or small businesses.

The Affordable Care Act of 2010 formed the marketplace as a means to attain maximum compliance with the mandate that all Americans be enrolled in health insurance. Many states offer their own marketplaces, while the federal government handles an exchange open to residents of other states. While you may not be able to pay for the same kind of plan an

employer would offer you, any amount of coverage is more helpful than being uninsured. In the event of a major mishap or the unfortunate arrival of a long-term illness, you will be better planned.

What is the average cost of private insurance?

While many people are frightened by the possibility of purchasing their own insurance, as opposed to enrolling in an employer-sponsored plan, some studies have demonstrated that it can end up being more reasonable at times than employer-sponsored plans.

For example, a study from the Kaiser Family Foundation observed that the average monthly premium for an employer-sponsored insurance plan for individual coverage in 2019 was $603. It was $1,725 for family coverage. On the other hand, according to the Kaiser Family Foundation,

if you were to buy your own insurance outside of an employer-sponsored plan,

the average cost of individual health insurance was $440. For families, the average monthly premium was $1,168.

In addition, if you end up buying coverage through the Health Insurance Marketplace, you may be eligible for a Cost-Sharing Reduction subsidy and Advanced Premium Tax Credits. These can decrease the amount you pay for premiums, as well as lowering your deductible, and any co-payments and co-insurance you are liable for.

From where can you buy private health insurance?

You have numerous options when it comes to buying private health insurance.

If you are (or are soon to be) retired, you can start on the website for Medicare. It is suggested

that you see what the standard Medicare plan covers and then look at alternatives for ways to supplement Medicare through Medigap and Medicare Advantage policies. When considering Medigap or Medicare Advantage coverage, it’s vital to understand how both work types of coverage work in combination with standard Medicare coverage.

As an outcome of the Affordable Care Act (ACA), the Health Insurance Marketplace was created in 2014. You can visit the Health Insurance Marketplace website to find out more about

the options for health insurance coverage that your state offers. You can also decide if you meet the criteria for any cost-saving measures and how to apply them.

The Health Insurance Marketplace has a certain open enrollment period. Normally, it is between November 1 and December 15 of a given year, even though certain incidents may lead to the open enrollment period being extended or reopened.

The website also contains information about private plans that are available for purchase outside of the Marketplace. However, if you purchase a plan outside the ACA’s Marketplace,

whether during open enrollment or not, you will not be entitled for any subsidies available under the ACA.

Under certain situations, an individual may be eligible to purchase a healthcare plan through the exchange even if it is outside of the specified open enrollment period. This is called a

“Special Enrollment Period.” You may be eligible for a Special Enrollment Period if you go through a household change, including getting married or divorced, having (or adopting) a child, a death in your family, moving, losing your health insurance, being in a national catastrophe, or

experiencing a disability.

Private Health Insurance Companies

You can also go through the websites of major health insurance companies in your geographic region and look through available options based on the type of coverage you prefer and the deductible you can pay for. The types of plans offered and the premiums will vary based on the state you live in. It’s crucial to note that the plan price quoted on the website is the lowest available price for that plan and presumes that you are in excellent health. You won’t understand what you’ll really pay per month until you apply and provide the insurance company with your medical history.

Pricing and the type of coverage can also vary considerably based on the health insurance company. Because of this, it can be challenging to truly compare the plans to decide which company has the best combination of rates and coverage. It can be a good idea to see which

plans offer the most of the features that you want and are within your price range, and then to browse consumer reviews of those plans.

If you’re choosing a family plan or you are an employer who is choosing a plan that you’ll provide to your employees, you’ll also want to think about the needs of others who will be covered under the plan.

Key factors for choosing a plan

Health insurance plans propose a variety of different features. While it may be difficult to find a plan that offers everything you wish for, think about which of the following features are the most medically and financially required. Here are some questions to consider when you are exploring plans:

  • Does the plan offer prescription drug coverage? Does it only cover generic versions of prescription drugs? What is the co-payment (also referred to as the co-pay) on generics and on name-brand drugs? Check the medicines you’re already taking, if any.
  • What is the office visit co-payment, and does the plan have instituted a maximum number of office visits that it will cover per year?
  • What is the co-payment for specialized services, such as x-rays, lab tests, and surgery? For an emergency room visit?
  • Do you want a plan that allows you to add-on vision and dental coverage?
  • Do you need pregnancy benefits?
  • Do you already have a doctor you like? If so, you might want to find a plan that contains your doctor in its insurance company’s provider network.
  • Do lifetime and annual maximum benefits apply? The ACA effectively eliminated lifetime and annual maximums for essential medical services, but this does not include, for example, dental and vision coverage.
  • Does the plan present free or discounted services for preventive care, such as an annual checkup? Most plans under the ACA provide free coverage for most preventative care services. Short-term insurance plans and catastrophic coverage may not.
  • Does the plan cover specialty services such as physical therapy, chiropractic, and acupuncture visits?
  • What hospitals are included in the network?
  • For PPOs, what is the cost for out-of-network services, should you want or need them? Can you afford this?

Buying your own health insurance policy may not be as simple as getting signed up with an employer’s plan. Though, once you figure out what you want and become acquainted with the terminology used to describe health insurance plans, your research may become simpler. With the number of options available, you can possibly find a plan that meets your needs—and your budget.

Sandra Johnson

Sandra Johnson

Sandra Johnson was a few years out of school and took a job as a life insurance agent in California, selling coverage door-to-door for Prudential. The experience taught her about the technical components of insurance and its benefits for individuals and society, as well as the misunderstandings people often have about insurance. She has over ten years’ experience in the insurance industry, having worked as both a Broker and Underwriter, assisting clients across a broad range of industries. At Insurance Noon, Sarah diligently gathers all the required information and curates up pieces to provide meaningful insurance solutions. Her personal value proposition is to demonstrate a genuine interest in always adding value for clients.Her determined approach to guiding clients has turned her into a platinum adviser to multiple insurers.