Health Insurance Premiums by Age

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Contributor, Benzinga
September 9, 2022

Wondering what age has to do with how much you’re paying for health insurance? The answer is that a person’s age is a major determining factor for health insurance companies. Here’s what you need to know about the rules that insurance companies must follow and what you can do to save on your health insurance costs. 

Average Insurance Premiums by Age

18 to 24: $278

25 to 34: $329

35 to 44: $411

45 to 54: $551

55 to 64: $784

How Does Age Impact Your Private Health Insurance Premiums?

Age is one of many factors that can impact your private health insurance premiums. It’s also the factor that is focused on the most. The general idea of insurance companies is that a younger person has fewer health risks than an older person. For that reason, insurance companies are more likely to offer a lower insurance premium to a young adult while charging senior citizens many times that premium. 

Today, there are age restrictions for health insurance. The insurance premium that is offered to a 21-year-old is considered the baseline (otherwise referred to as base rate or base amount) for insurance premiums. Insurance companies are not allowed to charge anyone more than three times that base amount. For example, if a 21-year-old had an insurance premium of $150, the most that a 64-year-old could be charged is $450.

People over the age of 65 cannot be charged more than three times the base rate either. At this point, most people become eligible for Medicare at age 65, making private health insurance premiums irrelevant. However, Americans can still elect to enroll in a private health insurance plan if they wish to. 

Do Medicaid Premiums Change With Age?

No, Medicaid premiums do not increase or decrease based on someone’s age. Income levels are the only factor that determines Medicaid premiums.

The Federal Default Age Rating Chart

Prior to the Affordable Care Act (ACA), insurance companies were able to set their own rules when it came to setting the premium amount for every enrollee’s plan, which led to older enrollees sometimes paying up to five times more for premiums than their younger counterparts. 

With the ACA, rules were put in place to limit how much insurance companies could charge enrollees based on their age. The current federal rule states that an adult aged 64 or older cannot be charged more than three times the base rate. The base rate is the average premium for a 21-year-old. 

States With Strict Age Rating Rules

Every state must follow the federal rule at a minimum. However, some states have made exceptions to the federal age rule to reduce the gap between premiums between younger and older adults overall. There are pros and cons to this, as it means that younger individuals in this state may pay a higher premium than in other states, and older individuals may pay less than they would in other states.

The states with their own guidelines regarding health insurance premiums based on age are:

  • Alabama, Mississippi and Oregon apply the federal rule to people 21 and older, but people under 21 pay a health insurance premium that is 63.5% of the base rate.
  • Massachusetts has an entirely different set of rules for all age groups. People within the 21 to 24 age bracket pay 118% of the base rate, while people 49 and older have a lower age ratio than the federal rule.
  • Minnesota applies the federal rule to people 21 and over. Health insurance policyholders under the age of 21 pay 89% of the base rate.
  • New York and Vermont don’t allow health insurance companies to use age as a factor when determining health insurance premiums.
  • Utah applies the federal rule to people 64 and older. On the other hand, people in the 27 to 36 age group pay almost 140% of the base rate. Children under age 14 have a fixed insurance premium that averages out to 79% of the base rate.
  • Washington, D.C. only allows health insurance companies to charge individuals 64 or older two times the base rate.

How to Improve Your Health Insurance Premiums

You can’t change your age, but you can do other things to help improve your health insurance premium. To do so, you should be aware of the factors that can impact your health insurance premium. It’s also important to know all your health insurance options. 

#1: Consider a group plan: Group plans are offered through employers, unions and some associations. These plans are typically less expensive than individual health insurance plans. If you enroll in a group plan through your employer, it may also contribute money toward your insurance premium. 

#2: Check to see if you’re eligible for government subsidies: If you’re buying an individual plan, you may be eligible for the Advanced Premium Tax Credit subsidy. This benefit lowers your monthly premium payment. 

#3: Ask about Medicaid: Every state offers a Medicaid program as well as the Children’s Health Insurance Plan (CHIP). These plans provide health insurance coverage with a low or no monthly premium to eligible low-income individuals and families. Your state’s Department of Health can help you determine whether you are eligible to enroll in one of these plans. You may also be able to enroll via the health insurance marketplace. 

#4: Consider a short-term plan: Short-term health insurance plans tend to be less expensive than private health insurance plans. There are pros and cons to purchasing a short-term plan, but it could be an option if you can’t afford other health insurance or if you missed the annual enrollment period. Short-term plans only offer coverage for up to a year, so it is not a long-term solution. Regulations for short-term health insurance plans also vary by state. You can expect that a short-term plan will not cover pre-existing conditions. It also may not cover mental health services, prescription drugs, maternity care and more. 

#5: Purchase a high-deductible plan: If you have several plan options to choose from, you might opt for a high-deductible plan. High-deductible plans typically have the lowest insurance premiums, so you’ll have less of a monthly expense to pay for your health insurance. However, high-deductible plans also mean that you can expect to pay more money out-of-pocket for your health care. You can expect to pay higher deductibles before your health insurance benefits will begin. 

#6. Consider a medical supplement plan: Additionally, you might consider supplemental insurance. These plans typically provide coverage for specific health conditions, critical care and accidents at a low cost. They also usually don’t come with a deductible. Supplemental plans can be a nice option to add on to a high-deductible plan if you’re worried about health care expenses. 

#7. See if you can get a health savings account: Health savings accounts (HSAs) are savings accounts that you can use to pay for medical expenses that are not paid by your health insurance. The money that you put into your HSA is tax-free or tax-deductible, allowing you to save on health expenses. HSA plans are often combined with high-deductible plans for extra peace of mind. 

#8. If you’re 65 or older, apply for Medicare: Medicare is health insurance that most Americans ages 65 or older are eligible for. In some cases, younger people can also be eligible if they are disabled. Medicare’s premiums are typically much lower than private health insurance plans. 

#9. If you’re under 26, consider staying on your parent’s health insurance plan: Adults under the age of 26 are eligible to remain on their parent’s health insurance plan. In most cases, staying on this family plan can help you save on health insurance. 

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With so many health insurance options out there, it can be difficult to keep up. That’s why Benzinga is committed to providing you with insights and information that will allow you to make an informed decision when it comes to your health care. 

Frequently Asked Questions


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About Ashley Hart

Ashley Hart is a personal finance writer passionate about helping people feel empowered to take control of their finances. She has more than eight years of writing experience, focused on insurance.