ACA is abbreviated for Affordable Care Act; many Americans know it as the Obamacare marketplace.  Since its inception in 2013 the ACA law has made monumental changes to the healthcare system throughout the entire country.  One very important part of the ACA law was allowing Americans who previously could not afford good healthcare to now be able to obtain it at affordable prices.  In this blog, we will take a deep dive into ACA Health Insurance Cost and how the law has helped millions of households across America to now have affordable, higher quality health insurance

There are several components that affect the ACA health insurance cost including a person’s age, county of residence, plan tier, and most importantly household income.  Let’s touch on each of these and how they influence the overall monthly premium cost.

  1. Age: The ACA law has a provision written into it that allows health insurers to charge a higher monthly premium based on age.  Basically, the older you are the higher the premium goes up.  However, the law states that a health insurer can not charge more than three times the amount of a younger individual.  This protects the older consumer from being gauged on price.  It is also important to have affordable prices for younger people so that they will purchase a plan even though they may be in good health.  This can help offset the cost for health insurers to cover older patients with higher medical expenses. 
  2. County of Residence (Location): Prices can vary based on state and county within each state.  More expensive areas to live in will typically have higher expenses for the healthcare system and therefore will cause people to have to pay more for health insurance.  Compare this with a more rural area where the cost of living is low and will typically have lower health insurance cost.  The number of health insurers in a specific county will also influence whether premiums are competitive or not.
  3. Plan tier: In most states there are three plan tier levels which are Bronze, Silver and Gold.  Like the precious metals the out-of-pocket maximum of the plan is:  Bronze – high deductible, Silver – Mid-level deductible , Gold – Low deductible.  When a consumer qualifies for cost sharing based on income, they will have the ability to enroll in a silver cost sharing plan which is the lowest deductible and lowest costing plan.
  4. Household Income: The law has made it much more affordable for lower income households to enroll in a plan through qualifying for subsidies from the government.  In some cases, a mid-level earning family can also qualify for some subsidies as well.  The lower the income the higher the subsidy amount a household will qualify for.  It is important to mention that there is a minimum income a household must make to qualify for subsidies. 

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