What is a health insurance premium?

A health insurance premium is the monthly amount paid to an insurance company to maintain health coverage. Premiums are separate from deductibles, copayments, coinsurance and other billing aspects.

What you’ll learn:

• A health insurance premium is the amount you pay for your health insurance every month.  

• Healthcare premiums are typically billed monthly. Premium amounts may vary by company, health plan type and more. 

• Health insurance premiums are billed regardless of whether the policyholder receives medical care. 

• In addition to premiums, policyholders could pay a deductible, copay and other medical expenses.

Health insurance premiums work by requiring you to pay a regular fee—usually monthly—to maintain healthcare coverage. The insurance company helps cover eligible medical costs according to the terms of each plan. 

Beyond monthly premiums, most health insurance plans include cost-sharing components that help determine how much insurance covers. Those components include deductibles, copays and coinsurance costs.

• Deductibles: The amount a policyholder must pay to healthcare providers before their insurance covers healthcare expenses. 

• Copays: Policyholders pay a fixed amount for covered services once they’ve met their deductible. For instance, a visit to the doctor might cost $100. But if you’ve met your deductible, you may be responsible for only $30 of that cost. 

• Coinsurance: This refers to the percentage of a healthcare cost the policyholder is expected to cover. It typically kicks in once the consumer reaches their deductible. 

For example, if a plan has a $1,500 yearly deductible and a 20% coinsurance rate, coinsurance will take effect once the policyholder pays the first $1,500 of medical expenses. At that point, insurance should cover anything beyond 20% of the covered medical costs.

Several factors could influence how much someone pays for a health insurance premium, including:

• Age

• Insurance provider

• Type of health plan

• The policyholder’s location

• Individual or family enrollment

• History of tobacco use

According to the Kaiser Family Foundation’s 2025 Employer Health Benefits Survey, employer-sponsored health insurance premiums averaged $26,993 per year for family coverage and $9,325 for single coverage. 

The average annual contribution amounts for covered workers are $1,440 for single coverage, similar to last year, and $6,850 for family coverage, higher than the amount last year. Employees contributed around $6,850 annually toward family plans, with employers paying the remaining share.

The health insurance marketplace is a platform established by the Affordable Care Act. These marketplace plans are broken into four categories: Bronze, Silver, Gold and Platinum. And the average cost can vary widely by state.

Keep in mind that plans with low premiums may have high deductibles. But platinum plans, which typically have the highest premiums, may have the lowest deductibles.

As of 2026, Medicare reported these premiums:

• Standard Medicare Part B (medical insurance): $202.90 per month for most enrollees, although higher-income beneficiaries may pay more.

• Medicare Part A (hospital insurance): typically $0.

Beneficiaries may also choose to enroll in a standalone Part D prescription drug plan or a Medicare Advantage plan, with average premiums varying by plan type, coverage level and income.

Here are some frequently asked questions about health insurance premiums.

People pay health insurance premiums to access medical coverage. But premiums are just one possible medical expense. Policyholders could also pay deductibles, copays, coinsurance and more. 

Want to learn more about managing healthcare costs? Check out this guide on how to pay medical bills.