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The Cost of Health Insurance in California

Many people are not aware of the actual cost of health insurance and 40 % of people who are uninsured actually have incomes greater than 200%of the national poverty rate and remain uninsured on this basis.

The Bottom Line

A 30 year old individual in relatively good health can expect to pay a premium that will vary from $60 to $250 per month depending on the deductible chosen and the particular benefits attached to each policy. For a young person about 20 years old, the cost is lower due to the assumed health of the individual, and will vary from $50 to $100 per month, and up to $200 for a prestigious policy.

A 40 year old will experience slight increases in premium and will typically pay between $100 and $300 per month in premiums, while a single 60 year old can be charged anywhere from $250 per month to $600, even if a clean bill of health has been achieved to date.

The addition of a spouse to the plan can often achieve a small saving but is just as likely not to, and in that instance will merely mean the premium of an individual is doubled. When a child is included to the family insurance plan the analysis is further complicated. The premiums then possess the characteristics of being extremely unpredictable and will vary enormously with different institutions.

In this case a family of two adults and a one year old child will be charged anywhere between $250 and $900 per month depending on the benefits of the plan. A ten year old child and also a 15 year old child appear to have no great impact on the premiums that can be expected. Indeed the addition of a second child will certainly increase the premium, but appears to do so only by about $50 per month.

Apart from the savings achieved by securing insurance through a group such as an employer or industry group, additional savings can be found by automatically deducting and paying the monthly premium electronically from a bank account and saving on billing charges.

Also, premiums can be reduced by increasing the copayment amount, and if you are a person in relatively good health, the incidence of paying an increased copayment on the rare occasions that you do indeed seek health care services, will be well worth the tradeoff for a smaller premium each month. In the same manner, an increase in the deductible amount will reduce the monthly premium charge dramatically.

For the correct people whose use of health care services is unlikely, this strategy may prove effective in keeping costs of health insurance to a minimum.

Health Savings Accounts

Creating a Health Savings Account (HSA health insurance in California) allows the reduction in income tax, as all contributions to this account will be tax deductible, and also provide the individual with a manner of insuring themselves for health expenses in the future.

After the account has been opened, a cheap health insurance policy with a high deductible but with cover for unexpectedly large medical bills should be opened. All medical expenses should satisfied with the contents of this account and the balance is rolled over each year to build a fund to pay for health expenses over time. In the event of dramatic injury and need for health care, the insurance policy will absorb the costs incurred.

 

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