How Much Does Health Insurance Cost In The USA?

Renowned as the most expensive country in the world for healthcare, the true cost of health insurance in the United States is a big talking point. Like other countries, the cost of health insurance in the US is based on a number of factors relevant to each individual – but with the cost of healthcare so high, and few options when it comes to state-funded treatment, residents of the US pay an additional premium for health insurance.

In this article, we’ll look at the typical cost of health insurance in the United States. So, if you’re thinking of visiting or moving to the US, you can make an informed choice.

What is the average cost of health insurance in the USA?

According to the Kaiser Family Foundation (KFF), the average annual cost of individual health insurance in the US in 2024 is US$8,951, while the average annual cost for a family health insurance plan is US$25,572. This represents a 6% YOY increase for individual plans from 2023, and a 7% increase for family plans.

However, this does not mean that most people in the United States pay a similar premium to the average. Not only can the cost of health insurance in the United States vary significantly from person to person, a large percentage of the country also receives subsidised health insurance through their employer.

This means employers typically cover the majority of their employees’ health insurance premiums, while the employees pay a percentage through their earnings. This percentage varies depending on the employee’s salary, and the size of the company.

In 2023:

• 12% of US workers received 100% of their health insurance through an employer, with the average annual premium costing US$7,944.84 per employee
• 88% of US workers contributed to their own health insurance plan. Their average annual premium was US$1,803.96, while their employers contributed US$6,214.56
• Therefore, an employee in United States typically pays around 22.4% of their health insurance premium, while their employer pays 77.6%

Source: U.S. Bureau of Labor Statistics

Higher earners pay more

Since the average is not entirely representative (as there are more people in the United States whose earnings are on the lower end of the salary spectrum), it’s helpful to break the data down according to salary ranges.

In 2023 the median annual contributions to an employer-supported health insurance policy among private sector employees in the United States came to:

Source: U.S. Bureau of Labor Statistics

The data reveals a wide range of individual contributions, with top earners in the United States paying over US$3,000 to their individual health insurance plans – six times as much as the lowest earners. Meanwhile, high-earning families pay over US$14,000 per year – five times as much as families on the lowest incomes.

Employees at small companies pay more

It’s also worth noting that the percentage share of employee contributions tends to be higher at small companies. In 2023, the average employee contribution by company size was:

Source: U.S. Bureau of Labor Statistics

For employees in America, working for a larger company can be more beneficial, as employers tend to contribute more towards employee health insurance. The difference between a small company (fewer than 50 employees) and a large company (>500 employees) is a staggering 12%.

Region makes a difference

Health insurance can also be more expensive in certain states and regions than others. In 2024, the most expensive region in America for insurance was the Northeast, while the South was the least expensive region.

The typical average premiums for individual and family health insurance plans divided by region looks like this:

Source: Kaiser Family Foundation

As you can see, an individual in the Northeastern region of the United States may end up paying over US$100 per month more than someone living in the South, or more than US$1,200 per year extra.

Urban dwellers pay more

It should also be noted that people who live in big cities tend to pay more than people who live in smaller cities and rural areas. This is because demand for healthcare tends to be much higher in big cities, pushing up prices.

For example, a 40-year-old who pays US$300 a month for health insurance in Philadelphia would pay just US$169 per month for the same policy in Pittsburgh – a 43% difference.

The cost of health insurance can also vary dramatically in different parts of each state. A 40-year-old in southwest Georgia who pays US$481 per month for health insurance would see his premium cut in half (50%) if he moved to the eastern part of the state, where his premiums would be US$238.

Source: KFF Health News

What determines the cost of health insurance in the USA?

As with anywhere else in the world, the price an individual pays for their health insurance in the United States depends on a number of factors.

An individual’s health insurance premiums are determined by their risk, i.e. how likely they will be to claim during the course of their policy.

The factors that may influence a person’s level of risk include:

• Age – people are more likely to experience health complications as they get older, meaning health insurance becomes more expensive with age.
• Occupation – some jobs are considered higher risk than others. A motorcycle courier will pay more for health insurance than an office worker.
• Location – some regions are considered higher risk, either because the incidence of disease may be higher in these regions, or because the cost of healthcare is higher.
• Medical history – previous health conditions are typically classified as pre-existing conditions. They may push up the cost of your health insurance, or be excluded altogether.

Factors unique to the USA

There are also several factors affecting the cost of health insurance that are unique to the US market. These include:

• State laws – different states have different laws when it comes to regulating health insurance. These laws determine how health insurance companies shape their policies, and may make certain states more expensive for health insurance than others. For instance, Texas and New York law mandates health insurance must include ultrasound and MRI screening for breast cancer, while California and Florida do not have this law.
• Deductibles – a deductible is the amount a person is expected to pay out of pocket for healthcare before they can start claiming through health insurance. It’s similar to an excess, but while an excess is applied with each individual claim, a deductible is a flat rate that spans across all healthcare purchases and resets each calendar year.
• Co-pay – a co-pay (or copayment) is a flat fee that must be paid at the point of care each time a patient utilises medical services. It is separate to a deductible, and must continue to be paid even if you have already paid your deductible for that year. The amount you co-pay, and the times you will be expected to co-pay should be outlined in your policy.

Types of plan

People in the US can also choose from four types of plan, each with a different price point. These include:

1. Health Maintenance Organization (HMO) – a more affordable type of plan, where access to healthcare is localised to one primary care physician (PCP), who will then refer you to other specialists within your network based on your needs.
2. Point of Service (POS) – similar to HMO, except your PCP will be able to refer you to out-of-network specialists. This can be important if you have a pre-existing condition, but will also cost more.
3. Exclusive Provider Organization (EPO) – similar to HMO and POS, but with access to a very large network. You should never need to leave this network for treatment, but you may pay more.
4. Preferred Provider Organization (PPO) – the most expensive option, this lets you see specialists (even if they are out-of-network) without a referral.

Why is healthcare so expensive in the USA?

It’s no secret the US is the most expensive country in the world for healthcare. It’s not even a close race – even when measured by multiple different metrics, healthcare in the US is far more expensive than in any other country.

To give one example, when it comes to health spending – the cost per citizen of both government and personal spending on healthcare across all products and services – the United States spent US$12,555.26 per capita in 2022. The country with the second highest spending, Switzerland, spent just US$8,049.11 – a whole 35% lower.

The reason Americans pay so much for health insurance is because the cost of healthcare is so high in the United States. But why is healthcare so expensive in the US compared to other countries?

There are a number of reasons, so let’s explore some of the main ones.

High pharmaceutical prices

The cost of any medicine is always at least twice as expensive in the US compared to other developed countries. A common example is insulin, used to treat diabetes. In the US, a single vial of insulin costs US$98.70. In Japan – the second-most expensive country for insulin – the same vial costs just US$14.40. So, the cost of insulin is almost six times the price in the US compared to the second-most expensive country.

There are many reasons why drug prices are so high in the US. It’s a combination of factors, ranging from low government regulation to high research and development costs, monopolisation of the pharmaceutical market, and lobbying from the pharmaceutical industry. What we can say for sure is that these costs are routinely passed on to patients, resulting in high insurance costs to cover the cost of prescriptions.

Multiple (and inconsistent) systems

The American healthcare system is highly fragmented and complex. With each state responsible for managing its own healthcare system, and a wider system that makes health insurance essentially mandatory, the sector is perpetually exposed to price gouging, monopolisation and lobbying. Patients regularly discover hidden costs, even when they are covered by insurance, and may lose their health insurance leaving them unable to access healthcare altogether.

All this complexity adds huge administrative costs. Indeed, administration is one of the biggest black holes in the American healthcare economy – adding between 15–25% extra to healthcare expenditure, amounting to between US$600 billion to US$1 trillion per year.

Hospitals are for-profit

Unlike in countries where healthcare is subsidised or government-funded, many hospitals in the United States are owned and operated by private companies. As many as 81.5% of hospitals in the US are privately owned, with around a quarter being for-profit hospitals.

A for-profit hospital seeks to maximise returns on behalf of its shareholders. This means they strive to provide the highest standard of healthcare, so that patients will choose those hospitals over less expensive options; but it also means the price of services, procedures and drugs will be higher in these hospitals compared to others.

Specialists’ salaries

Doctors and other medical specialists in the US are among the highest paid in the world. With an average salary of US$261,226, they come second only to Switzerland, earning nearly US$100,000 more than doctors in the UK (US$169,868) and twice the salary of doctors in countries including Japan, Spain and Sweden.

Because of the cost of employing doctors, patients in the US are expected to pay more for medical appointments and procedures. This is especially true if they are being consulted by highly-trained specialists. The highest-earning doctors in the US are neurosurgeons, who earn an average of US$763,908 per year.

Defensive medical practices

Medical practitioners are under unusually high scrutiny in the US, with American physicians the most likely in the world to be sued for medical malpractice. Nearly 20,000 medical malpractice lawsuits are filed every year in the US. This has led to doctors adopting defensive practices to mitigate the risk of legal action.

This means they are more likely to recommend unnecessary diagnostic tests and procedures, avoid consulting patients who are more likely to sue them, and recommend less risky procedures (even when they are less effective).

Medical providers are also known to employ expensive legal aides to protect them from the risk of legal action, and set aside large sums of money in case they need to make a settlement. The costs incurred by medical providers defending themselves from legal action is believed to add tens of billions every year to the US healthcare budget.

How do health insurance subsidies work in the USA?

The US federal government provides subsidies to people who struggle to afford the cost of health insurance, in accordance with the Affordable Care Act (ACA). These subsidies are available to individuals and families who purchase health insurance through the government’s own Health Insurance Marketplace and come in two forms: Premium Tax Credits (PTCs) and Cost-sharing Reductions (CSR).

1. Premium Tax Credits help lower the monthly premiums for health insurance purchased through the Health Insurance Marketplace. The credit received is weighted according to income.
2. Cost-sharing Reductions help to lower out-of-pocket costs, such as deductibles and copayments. They are again weighted according to income.

To qualify for subsidies, the individual or family must have an income of at least 100% of the federal poverty level.

Medicare and Medicaid

Established in 1965 under the Social Security Act, Medicare and Medicare are joint federal health insurance programmes for people aged 65 and over, and vulnerable adults and children in the United States.

What is Medicare?

Medicare is a government insurance policy for people in the US aged over 65. It is divided into Original Medicare and Medicare Advantage. Original Medicare offers Part A and Part B insurance:

• Part A (Hospital Insurance) covers inpatient hospital stays, nursing homes and hospice care, and some home care
• Part B (Medical Insurance) covers outpatient services, doctors consultations, medical supplies and preventative services

Medicare Advantage is known as Part C, and provides Part D insurance (Drug coverage), which covers the cost of prescription drugs and vaccines.

Medicare is federally administered (meaning it is the same in every state across the US) and funded by the US Treasury, although Medicare patients will be expected to pay some of their costs through monthly premiums, deductibles and copayments.

What is Medicaid?

Medicaid is a public health insurance programme intended for people and families with limited incomes and resources. This includes children, pregnant women, older people and people with disabilities.

Medicaid is state-run, and each state is free to set its own eligibility criteria, although the federal government provides matched spending of anywhere between 50–83%. Medicaid is typically intended for people in the most amount of need. 38% of Medicaid patients are children, while disabled people account for 14%.

Medicaid was one of the government programmes radically overhauled in 2010 by the Affordable Care Act, also known as Obamacare.

What is Obamacare?

Obamacare, officially titled the Affordable Care Act (ACA), was a piece of legislation passed in 2010 to improve access to healthcare for all Americans.

Obamacare mandated that everyone in the United States must buy health insurance, or else face a financial penalty. By forcing all Americans to get medical cover – even the young, healthy ones – it significantly lowered the average cost of insurance premiums across the country.

It is estimated that Obamacare ensured 24 million more Americans took out health insurance policies. Even so, in 2025, around 25.3 million Americans remain uninsured.

In 2025, President Donald Trump proposed sweeping reforms to the ACA, which will effectively undo the policy of providing automatic health insurance enrollment to Americans. The reforms are intended to provide around US$20 billion of cost-savings, but critics have warned that millions of Americans may lose their health insurance policies. The reforms remain under discussion.

Can expats receive Medicare and Medicaid?

It is possible for non-citizens permanently living in America to receive Medicare and Medicaid.

The eligibility requirements will be different depending on whether you are a legal permanent resident (AKA a Green Card holder), the non-citizen spouse of a US citizen, a working expat or a refugee.

• Green Card holders may qualify for Medicare if they can prove they’ve paid into Medicare system through federal taxes
• Non-citizen spouses may be eligible for Medicare through their partner’s Social Security credits
• Working expats who have been granted legal residency are eligible for Medicare so long as they have paid into the Medicare system through federal taxes for at least 10 years
• Refugees and asylum seekers are typically eligible for Medicare after a five-year waiting period, although most states choose to waive this waiting period

Refugees and asylum seekers are also eligible for Medicaid, although other non-citizen permanent residents may encounter stricter terms and policies, and will be subject to the five-year waiting period.

American health insurance vs international cover: what’s the cost difference?

International health insurance is a product designed to offer cross-border coverage. Many Americans are surprised by how affordable health coverage can be when they spend time overseas – so how does this product compare to domestic cover?

At William Russell, our most comprehensive international health insurance plans provide standard coverage in every country except the USA. We’ve published a full guide on how we calculate premiums for health insurance. By comparing our typical premiums to U.S. averages, it’s possible to get an idea of the cost difference between health insurance in the USA and other nations.

*Source: KFF
**Based on William Russell premiums for US citizens moving to Portugal on Silver Plan with US$500 excess

How does health insurance work for US citizens living abroad?

American expats and others living abroad, including students, will often find health insurance works differently for them.

Does my US health insurance cover me abroad?

Most of the time, your domestic health insurance plan doesn’t provide cover abroad, but there are some cases it will – for instance, for emergencies, medical evacuations or during short trips.

Contacting your provider is usually the best way to find out. Sometimes, even if your insurer will cover care in such cases, you may need to pay out-of-pocket and apply for reimbursement.

Do US citizens living abroad have to buy health insurance?

Americans who live abroad, or who spend a large proportion of their time overseas, often find they’ll need a separate health insurance policy for this.

One option is to buy local insurance, but this won’t cover you for trips home and you may find there are language barriers if you need to make a claim.

International health insurance is a popular alternative for American expats living overseas. With William Russell, English-speaking customer service representatives handle every stage of your claim from our UK offices, so you’re in safe hands.

International health insurance for US citizens living abroad – what’s covered?

How much you’ll pay for health insurance isn’t a number you can guess. It’s affected by many factors, few of which you control.

With William Russell, international health insurance can cover US citizens for:

• Doctor visits, consultations, hospital care and mental health treatment in multiple overseas territories (depending on the plan you choose)
• Up to US$100,000 for unexpected elective medical care and up to US$250,000 in emergency treatment costs during short visits back to US soil*, for reassurance when you visit family or head home for the holidays

*If you have selected USA-45 add-on.

Wherever you go, go with total peace of mind

No matter where you go, you can take one thing off your mind. William Russell offers international health insurance that covers you for everything from minor injuries to long hospital stays. We can even offer emergency medical evacuation to patients who require emergency life or limb-saving treatment in other countries which isn’t available locally.

At William Russell, we have been providing worldwide health cover for over 30 years, helping expats like you and their families to settle into their new homes. Speak to us today to find out more about how international health insurance could support you.