Health insurance is one of the most important and expensive purchases that a family can make. The cost of health insurance depends on many factors, such as the type of plan, the level of coverage, the size of the family, the age and health status of the members, and the state and region where they live. In this blog post, we will explore some of the average costs of health insurance for a family of five in the United States, as well as some tips on how to save money and find the best plan for your needs.
- The cost of health insurance for a family of five can range from $1,437 to $3,198 or more per month, depending on the type of plan and the source of data.
- An HDHP with an HSA can help save money on taxes and accumulate funds for future medical expenses.
- Subsidies and tax credits can lower the premium and out-of-pocket costs for eligible families who buy a plan through the Health Insurance Marketplace.
- An HCSM can offer lower monthly fees and more flexibility than traditional plans for families who share similar religious or ethical beliefs.
The Average Cost of Health Insurance for a Family of 5
According to the 2023 Milliman Medical Index (MMI), which measures the average cost of health care for a typical American family of four covered by an employer-sponsored preferred provider organization (PPO) plan, the total cost was $30,700. This includes both the employer and employee contributions to the premium, as well as the out-of-pocket expenses such as deductibles, copays, and coinsurance. Assuming that adding an additional child to the family would increase the cost by about 25%, the estimated cost for a family of five would be around $38,375 per year, or $3,198 per month. However, this is only an approximation based on one type of plan and one source of data. The actual cost may vary significantly depending on the specific plan and family situation.
Another source of data is the eHealth Price Index, which tracks the average premiums and deductibles for individual and family health insurance plans sold through eHealth.com, an online marketplace. According to their report for 2023, the average monthly premium for a family health insurance plan was $1,437, and the average annual deductible was $8,352. This means that a family would pay $17,244 per year in premiums and potentially another $8,352 in deductibles before their insurance kicks in. However, this does not include other out-of-pocket costs such as copays and coinsurance, which can add up quickly. Moreover, this is based on plans sold through eHealth.com only, which may not reflect the entire market or the plans offered by employers.
A third source of data is the Kaiser Family Foundation (KFF), which conducts an annual survey of employer-sponsored health benefits. According to their 2022 survey, the average annual premium for a family health insurance plan sponsored by an employer was $22,885. Of this amount, the employer paid $15,159 (66%) and the employee paid $7,726 (34%). The average annual deductible for a family plan was $4,664. However, this is based on plans offered by employers only, which may not be available or affordable for everyone.
As you can see, there is no definitive answer to how much health insurance costs per month for a family of five. The range can be anywhere from $1,437 to $3,198 or more depending on the source of data and the type of plan. The best way to find out how much you would pay is to compare different plans from different sources and see what fits your budget and needs.
How to Save Money on Health Insurance for a Family of 5
Health insurance can be a big financial burden for many families, especially those with five or more members. However, there are some ways to reduce your expenses and get more value from your plan. Here are some tips on how to save money on health insurance for a family of five:
- Shop around. Don’t settle for the first plan you see or the one offered by your employer. Compare different plans from different sources, such as online marketplaces, brokers, agents, or directly from insurers. Look at not only the premiums and deductibles but also the benefits, network, and customer service. You may find a better deal or a more suitable plan elsewhere.
- Choose a high-deductible health plan (HDHP) with a health savings account (HSA). An HDHP is a type of plan that has a lower premium but a higher deductible than a traditional plan. This means that you pay less upfront but more out-of-pocket when you use health care services. However, if you pair an HDHP with an HSA, you can save money on taxes and accumulate funds for future medical expenses. An HSA is a special account that allows you to contribute pre-tax dollars and withdraw them tax-free for qualified medical expenses. You can also invest your HSA funds and earn interest or returns tax-free. For 2023, the maximum annual contribution limit for an HSA is $7,300 for a family.
- Take advantage of subsidies and tax credits. If you buy a health insurance plan through the Health Insurance Marketplace, also known as Obamacare, you may be eligible for subsidies and tax credits that can lower your premium and out-of-pocket costs. Subsidies are based on your income and family size and can reduce your premium by a percentage or a fixed amount. Tax credits are based on your income and the cost of the second-lowest silver plan in your area and can reduce your tax liability or increase your refund. To qualify for subsidies and tax credits, your income must be between 100% and 400% of the federal poverty level (FPL) for your family size. For 2023, the FPL for a family of five is $31,900, so your income must be between $31,900 and $127,600 to be eligible.
- Join a health care sharing ministry (HCSM). An HCSM is a nonprofit organization that facilitates the sharing of health care costs among its members who have similar religious or ethical beliefs. HCSMs are not health insurance plans and do not have to comply with the Affordable Care Act (ACA) regulations, such as covering essential health benefits or accepting people with pre-existing conditions. However, they can offer lower monthly fees and more flexibility than traditional plans. HCSMs operate on the principle of mutual aid and voluntary contribution, so you have to agree to follow their rules and guidelines, such as abstaining from tobacco, alcohol, or drugs, or adhering to a certain faith or lifestyle. HCSMs are not for everyone, but they can be an alternative option for some families who share the same values and beliefs.
Health insurance is a complex and costly topic that affects many families in the United States. The cost of health insurance for a family of five can vary widely depending on many factors, such as the type of plan, the level of coverage, the size of the family, the age and health status of the members, and the state and region where they live. There is no simple answer to how much health insurance costs per month for a family of five, but there are some ways to estimate it based on different sources of data and some tips to save money and find the best plan for your needs. The most important thing is to do your research, compare different options, and choose a plan that fits your budget and needs.