Health Insurance Articles, Research & Resources

Kaia Koglin
Last updated:
Erin L. George, MFT
Erin L. George, MFT
Medical editor

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What Is Health Insurance?

Health insurance is a way to pay for health care. As with all insurance, a person pays a monthly premium and in return the insurer pays for some or all health care costs. Health insurance companies pool the premiums of people on the same plan to spread their risk. Healthier people have lower costs to the companies and counterbalance people with high costs.

The Affordable Care Act (ACA) of 2010 helped standardize affordable health insurance for Americans. It defined essential health benefits and mandated that nearly all residents have coverage. Congress repealed that requirement in 2017; however, some states still have an individual mandate.

Around 53% of Americans have employer-provided insurance, and a further 10% purchase their own insurance. (1) There are also public options including:

  • Medicaid: For low-income people
  • Medicare: For seniors and people with certain disabilities
  • TRICARE: For uniformed service personnel, retirees and their families (2)

The Census Bureau found that 27.2 million people, or 8.3% of the population, were uninsured at some point in 2021. (1) In addition, research has found that almost one quarter of working age adults are underinsured. (3) This means that their coverage doesn’t allow them to affordably access health care.

Not having health insurance can lead to poorer mental health. Uninsured people have higher levels of overall stress. (4) In addition, only 38% of uninsured adults with symptoms of anxiety or depression receive treatment. (5) Individuals who find the best health insurance for their needs are much more likely to receive the care they require. 

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How Much Is Health Insurance? 

Calculating the cost of health insurance for an individual is difficult. A person’s location, age, health needs, and plan choice all impact the overall cost. The total cost also includes both premiums and out-of-pocket costs.

Premiums are the monthly health insurance payments. In 2022, the average premium for employer health benefits was $7,911 for single coverage and $22,463 for family coverage. (6) This equates to $659 monthly for singles and $1,872 per month for families. Costs tend to be lower for people purchasing their own insurance on the marketplace. National averages for a single 40-year-old in 2023 range from $342 to $472 per month, depending on the type of plan. Averages for families aren’t currently available.

The government provides funding to help low-income residents access affordable health insurance. This assistance increased recently, allowing four out of five consumers to find insurance for $10 or less per month, according to the Centers for Medicare & Medicaid Services (CMS). (7) However, these funding arrangements may change in the future.
In addition to monthly premiums, insured people also have to pay out-of-pocket costs.

  • Deductibles: The amount paid out-of-pocket before insurers pay for services
  • Copay: A fixed amount paid for services
  • Coinsurance: A percentage of costs the insured person pays for services>

Many health insurance plans require that beneficiaries use certain health care providers, known as in-network providers. Using out-of-network providers may mean paying the full cost of the service. Each year an out-of-pocket limit is set. After an individual has paid that much for in-network services, the insurance company pays 100% of costs. In 2023, the out-of-pocket limit for ACA-compliant plans was $9,100 for individuals and $18,200 for families. (8)

What Does Health Insurance Cover? 

ACA-compliant plans must include 10 categories of services, known as essential health benefits. (9) These essential benefits are:

  • Ambulatory care (outpatient care received without being admitted to hospital)
  • Emergency services
  • Hospitalization, such as surgery and overnight stays
  • Pregnancy, maternity, and newborn care
  • Mental health disorder and supstance use disorder care
  • Rehabilitative and habilitative services and devices (services to help people recover or gain mental or physical skills)
  • Laboratory services
  • Prescription drugs
  • Preventive and wellness services, and management of chronic disease
  • Pediatric care, including vision and dental (vision and dental care isn’t an essential benefit for adults) (10)

All marketplace plans must include these services, as well as birth control and breastfeeding benefits. There are some plans that don’t have to offer these benefits. This includes plans purchased before March 2010, and plans from large companies that self-insure. However, many plans that don’t have to offer these benefits still do to remain competitive. Other services are often covered, but these depend on the plan.

Although mental health services are essential benefits, it's still difficult to access care. Many mental health providers don't accept insurance, and research from 2016 found that 25% of people don't have any mental health providers listed in their plan's network, which means paying out-of-network prices for care. (11) People who require mental health care should research before selecting a plan to make sure they're able to access the services they need. This research should include the cost of behavioral health copays.

How to Get Health Insurance 

The Health Insurance Marketplace was set up as part of the ACA. The national marketplace,, is available throughout the country. Some states also run their own marketplace.

An individual can fill in the marketplace application to receive a list of plans available to them. The marketplace also advises if they’re eligible for Medicaid, the Children’s Health Insurance Plan (CHIP), or other savings. (12) The person chooses a plan based on price, benefits, and their individual needs and enrolls. Paying the monthly premium ensures coverage continues.

In general, people can only enroll in or change health insurance during the Open Enrollment Period, which runs from November 1 to January 15 each year. (13) However, certain life events lead to a special enrollment period at other times of the year. These include:

  • Getting married or divorced
  • Having a baby
  • Moving to a new ZIP code or county
  • Leaving incarceration
  • Loss of health insurance (14)

People can apply for Medicaid and CHIP at any time.

What Is a Deductible for Health Insurance? 

A deductible is part of the out-of-pocket costs for health insurance. Essentially, it’s the amount the insured person must pay before the insurance company begins paying for services. For example, a $1,500 deductible means the insured person must pay the first $1,500 worth of care, even for covered services.

Typically, plans with higher deductibles have lower monthly premiums. Plans may have separate deductibles for some services, such as prescription drugs. Family plans may also have an individual deductible for each person covered, as well as a family deductible that applies to everyone in the family. (15)