How health insurance premiums work and what determines your monthly cost.
The Basics: What a Premium Is
Your health insurance premium is the monthly (or annual) payment you make to your insurance
company to maintain your health coverage — regardless of whether you use any healthcare
that month. The premium is like your membership fee for being covered. You pay it even in months
when you don’t see a doctor or fill a prescription.
Your premium is separate from your deductible, copay, and coinsurance — those are what
you pay when you actually receive care. The premium is just the cost to keep your plan active.
What Determines Your Premium
On ACA-compliant plans, premiums can only vary based on a limited set of factors:
Age: Older individuals pay higher premiums. Insurers can charge up to 3x more
for older enrollees compared to younger ones.
Location: Premiums vary significantly by state and even by county within a state,
based on local healthcare costs and carrier competition.
Plan metal tier: Bronze plans have the lowest premiums; Platinum plans have the highest.
Tobacco use: In most states, insurers can charge tobacco users up to 50% more.
Household size: Family plans with more covered members have higher premiums.
Insurers cannot charge more based on your health history, pre-existing conditions, or sex under the ACA.
ACA Subsidies Reduce Your Premium
If your household income falls below 400% of the federal poverty level (approximately $60,000 for a
single person in 2026), you may qualify for ACA premium tax credits that directly reduce your monthly
premium. The subsidy is applied at the point of sale — you pay the net (post-subsidy) amount
each month rather than paying the full premium and waiting for a tax refund.
Employer Premium Contributions
If you get insurance through an employer, your employer typically pays a significant portion of the
premium — often 70–80% for employee-only coverage and 50–60% for family coverage.
You pay the remaining employee contribution, usually pre-tax through payroll deduction. The employer’s
contribution does not appear on your paycheck but is part of your total compensation.
See what’s available in your area
Enter your ZIP code and Daniel will pull the options you actually qualify for.
Please enter a valid 5-digit ZIP code.
🔒 No obligation · Free service · Licensed in 21 States · NPN #22052447
✔ Options are available in
Where should Daniel send them?
He’ll reach out by call or text — usually the same day, never out of the blue.
Find out how to reduce your health insurance premium.