What Was the Cost of Private Family Health Insurance in 2018?

Understanding the cost of private family health insurance in 2018 offers insights into past healthcare trends. Examining historical data provides context for how premiums are calculated and the factors contributing to their variability.

Understanding Average Family Health Insurance Costs in 2018

In 2018, private health insurance costs for families varied significantly based on whether coverage was employer-sponsored or purchased directly on the individual market. For family coverage through an employer, the average annual premium reached $19,616.

Employers contributed a significant portion of this cost. In 2018, the average employer contribution for family coverage was about $14,069. Covered workers, on average, contributed $5,547 toward their family’s annual premium, representing about 29% of the total cost.

For families purchasing insurance on the individual market, often through Affordable Care Act (ACA) marketplaces, unsubsidized premiums differed. Analysis projected the lowest-cost bronze plan for an average unsubsidized family of three to be around $1,126 per month, totaling about $13,512 annually. For a family of four, unsubsidized monthly premiums were slightly higher, about $1,417 in 2018.

These unsubsidized costs highlight the full price of plans before federal tax credits or subsidies were applied, which could significantly reduce the out-of-pocket premium for eligible households. Increases in unsubsidized silver plan premiums in 2018, averaging 32% nationally from 2017, were due to the discontinuation of cost-sharing reduction payments to insurers. This impacted listed premium prices for marketplace plans.

Key Factors Influencing Family Health Insurance Premiums

Several factors contributed to the variations in family health insurance premiums in 2018. The type of plan chosen was a factor, with common options including Health Maintenance Organizations (HMOs), Preferred Provider Organizations (PPOs), Exclusive Provider Organizations (EPOs), and Point of Service (POS) plans. PPOs remained the most prevalent choice, covering 49% of insured workers in 2018. Plans with higher deductibles, such as High-Deductible Health Plans with a Savings Option (HDHP/SOs), typically had lower monthly premiums compared to plans with lower deductibles.

The deductible, the amount a family must pay for covered services before the insurance plan begins to pay, varied. In 2018, the average deductible for single coverage was $1,573. For family coverage, deductibles differed based on firm size, averaging $2,132 in small firms and $1,355 in large firms. Beyond the deductible, an out-of-pocket maximum limited the total amount a family would pay for covered services in a plan year, federally capped at $14,700 for a family in 2018.

Geographic location also significantly influenced premiums, reflecting regional differences in healthcare costs, provider availability, and state-specific regulations. For instance, families in the Northeast typically faced higher premiums, while those in the South might have found relatively lower costs. Premiums could even vary within a state, depending on whether the area was urban or rural.

Family composition, including the number of individuals covered and their ages, directly impacted the premium calculation. Insurers were permitted to charge more for plans covering a spouse or dependents. Under the ACA, older family members could be charged up to three times more than younger adults for the same plan. Additionally, tobacco use could result in significantly higher premiums, with insurers allowed to charge tobacco users up to 50% more than non-users in many states.

Sources of Health Insurance Cost Data

Reliable information on health insurance costs, particularly for historical periods like 2018, is compiled and disseminated by several prominent organizations. The Kaiser Family Foundation (KFF) is a widely recognized source, especially for data on employer-sponsored health benefits. Their annual Employer Health Benefits Survey provides detailed insights into premiums, employee contributions, and other aspects of workplace coverage. The 2018 survey, for example, involved interviews with over 2,100 private and non-federal public firms.

For data concerning the individual health insurance market, the Centers for Medicare & Medicaid Services (CMS) is a primary resource. CMS collects and publishes data related to ACA marketplace plans, including premium information and enrollment trends. These data are often derived from rate review submissions by insurers and marketplace enrollment records.

Additionally, private entities like eHealth conduct analyses based on their extensive customer data and projections. These reports offer perspectives on unsubsidized premiums and affordability challenges faced by consumers in the individual market. Another valuable source is the Agency for Healthcare Research and Quality (AHRQ), which utilizes data from the Medical Expenditure Panel Survey (MEPS) to report on private-sector employer-sponsored health insurance premiums. These diverse sources collectively provide a comprehensive understanding of health insurance costs.