Quick answer
A premium is what you pay every month to keep your health insurance active, whether or not you use any care. It’s separate from what you pay when you do get care, like deductibles, copays and coinsurance. In 2025 the average worker paid $6,850 a year toward family coverage at work, and in 2026 marketplace enrollees paid $178 a month on average after subsidies.
Key takeaways
- You pay a premium every month to keep coverage. If you stop paying, the plan ends after a grace period.
- Premiums don’t count toward your deductible or out-of-pocket maximum.
- ACA plan premiums depend on age, location, plan level, tobacco use and who’s covered, never on your health.
- Premium tax credits lower marketplace premiums for people with income between 100% and 400% of the federal poverty level.
- A lower premium usually means higher costs when you use care, so compare the full-year cost.
On this page
How a premium fits with your other costs
Your premium buys the coverage. When you actually use care, other costs kick in:
- Deductible: what you pay for covered care each year before the plan starts sharing costs.
- Copays: flat fees for visits or prescriptions.
- Coinsurance: your percentage of a bill after the deductible.
- Out-of-pocket maximum: the most you’ll pay for covered in-network care in a year, not counting premiums.
Plans balance these against each other. A plan with a low premium usually has a higher deductible and higher copays, and a plan with a high premium usually costs less when you need care.
What sets your premium
For marketplace plans and small-business plans, insurers can only base premiums on a few things:
- Age. Older adults can be charged up to three times as much as young adults.
- Where you live. Prices vary by state and county.
- Tobacco use. Insurers can charge tobacco users up to 50% more.
- Who’s covered. Each person on the plan adds to the premium.
- The plan you pick. Bronze plans cost the least and platinum plans the most.
Insurers can’t charge more because of your health, a pre-existing condition or your gender. Large employers set what workers pay on their own, and most cover a big share of the premium. How health insurance rates are determined goes into more detail.
What people pay
| Coverage | Average premium |
|---|---|
| Employer family coverage, total | $26,993 a year (2025) |
| Worker’s share of family coverage | $6,850 a year, about $571 a month (2025) |
| Employer single coverage, total | $9,325 a year (2025) |
| Marketplace benchmark silver plan, 40-year-old, before subsidies | $625 a month (2026) |
| Marketplace enrollees, after subsidies | $178 a month per person (2026) |
Marketplace premiums rose sharply in 2026. Benchmark prices went up 26% on average, and the larger subsidies from 2021 through 2025 expired, so what enrollees paid after subsidies jumped 58%. For 2027, insurers have asked for a median increase of about 15%.
Premium tax credits
If you buy a marketplace plan and your household income is between 100% and 400% of the federal poverty level, a premium tax credit caps what you pay for the benchmark silver plan at a share of income: from 2.10% to 9.96% in 2026, and from 2.15% to 10.22% in 2027. You can have the credit sent to your insurer each month to lower your bill, or claim it on your tax return.
If you take it in advance, you settle up at tax time. Starting with 2026 coverage, there’s no cap on how much you may have to pay back if your income ends up higher than you estimated, so report changes during the year. See how health insurance subsidies work.
Paying your premium
- Marketplace plans: you pay the insurer directly, usually monthly. Coverage doesn’t start until your first payment is received. If you get a premium tax credit and miss a payment later, you have a three-month grace period before coverage ends.
- Job-based plans: your share usually comes out of your paycheck before taxes.
- Self-employed: you can usually deduct your premiums. See is health insurance tax deductible.
Ways to lower your premium
- Apply through the marketplace to see if you qualify for a premium tax credit.
- Compare a bronze plan, which has the lowest premiums, and pair it with an HSA if you can save for the deductible.
- Check whether joining a spouse’s employer plan costs less.
- If you use tobacco, ask about cessation programs. Some employer plans waive the tobacco surcharge if you join one.
- Compare insurers, since rates differ between companies for similar plans. More ideas in the cheapest ways to get health insurance.
See premiums for plans in your area: compare quotes by ZIP code.
Frequently asked questions
Do premiums count toward my deductible?
No. Premiums keep you covered. Only what you pay for covered care counts toward your deductible and out-of-pocket maximum.
What happens if I miss a premium payment?
You get a grace period: three months for marketplace enrollees who get a premium tax credit, and usually shorter otherwise. If you don’t catch up, the insurer can end your coverage, and you may have to wait for open enrollment to get a new plan.
Why did my premium go up?
Usually because of yearly rate increases, a birthday that moves you into a higher age band, or a change in your subsidy. Check your plan’s renewal notice and update your income on the marketplace.
Are premiums tax-deductible?
Job-based premiums are usually paid pre-tax. Self-employed people can generally deduct theirs, and others may deduct premiums as medical expenses if they itemize.
Sources
This article is general information, not tax or insurance advice. Premiums and subsidy rules change every year and vary by state, so check HealthCare.gov, your state’s marketplace or a licensed agent for your situation. Last reviewed September 2026.