How to Calculate Your Monthly Health Insurance Premium

Health insurance premiums can be difficult to calculate. This guide will show you how to calculate your monthly health insurance premium.

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Your monthly health insurance premium is based on several factors, including your age, gender, tobacco use, and the plan you choose. In most cases, you’ll also have to pay a deductible, which is the amount you’ll pay for services before your insurance company starts to cover them.

To get an estimate of what your monthly premium could be, you can use an online calculator or contact a health insurance agent.

What is a health insurance Premium?

Your health insurance premium is the amount you pay to your health insurance company each month to keep your coverage active. This payment is usually made automatically from your checking account or credit card, and it covers part or all of the cost of your medical care for the month.

How is My Monthly Health Insurance Premium Calculated?

There are a few different factors that go into calculating your monthly health insurance premium. Your age, the plan you choose, whether you smoke, and your zip code all play a role. In this article, we’ll discuss how each of these factors affects your premium and what you can do to lower it.


One of the primary factors in how your monthly health insurance premium is calculated is your age.

For example, if you are a 20-year-old non-smoker, you can expect to pay a lower monthly premium than a 40-year-old smoker.

The reason for this is that younger people are generally healthier and have less need for medical care than older people.

Additionally, smokers are considered to be higher risk than non-smokers, and so they also pay higher premiums.


Your monthly health insurance premium is calculated based on a number of factors, including your age, your gender, your zip code, the type of plan you choose, and whether or not you smoke. In general, women tend to pay slightly higher premiums than men do, since they tend to live longer and use more health care services.


One of the main factors used to calculate your monthly health insurance premium is your location. Insurance premiums are typically higher in urban areas than rural areas due to the higher cost of living and the greater number of health care providers available. Your location can also affect your premium if you live in a state with a high rate of medical inflation.

Tobacco Use

One of the questions you may be asked when you apply for health insurance is whether you use tobacco. If you do, your monthly premium will likely be higher than it would be if you didn’t.

How much higher depends on the state you live in and the insurance company you buy from. But in general, if you smoke, you can expect to pay at least 50% more for your health insurance than someone who doesn’t smoke.

Some states don’t allow insurance companies to charge more for people who use tobacco. If that’s the case in your state, you may not see a difference in your premium even if you do use tobacco.

Plan Type

There are three types of health insurance plans – HMO, PPO, and EPO – and each has a different way of calculating monthly premiums.

HMO: Health Maintenance Organization plans have the lowest monthly premiums, but also the fewest doctors and hospitals to choose from. Your care is also managed by a primary care doctor, who must give referrals for specialists.

PPO: Preferred Provider Organization plans have higher monthly premiums than HMOs, but you have a wider network of doctors and hospitals to choose from. You also don’t need a referral to see a specialist.

EPO: Exclusive Provider Organization plans have the highest monthly premiums, but you have the most flexibility in choosing your doctors and hospitals. You also don’t need a referral to see a specialist.

How to Lower Your Monthly Health Insurance Premium

You can lower your monthly health insurance premium by shopping around for the best rates, opting for a higher deductible, and taking advantage of any health insurance discounts you may be eligible for. Keep reading to learn more about how to lower your monthly health insurance premium.

Stay In-Network

One of the best ways to lower your monthly health insurance premium is to stay in-network. In-network providers have agreed to charge the insurance company a set rate for their services. This rate is usually lower than what they would charge an uninsured patient or someone with out-of-network coverage. When you use an in-network provider, you’ll only have to pay your copay or coinsurance. You won’t be responsible for any other charges.

Use Health Savings Accounts (HSAs)

If you enroll in a health insurance plan with a high deductible, you may be eligible to open a Health Savings Account (HSA). With an HSA, you can make tax-free contributions to pay for qualified out-of-pocket medical expenses. The money in your HSA can roll over from year to year, and it’s yours to keep even if you change jobs or health insurance plans.

To be eligible for an HSA, you must be enrolled in a high-deductible health insurance plan. For 2020, that means a plan with a deductible of at least $1,400 for an individual or $2,800 for a family. If you have an HSA-eligible health insurance plan, you can open an HSA at most banks, credit unions and savings and loan associations.

You can use your HSA to pay for qualified out-of-pocket medical expenses, such as doctor visits, dental care, prescriptions and more. You can also use your HSA to pay for health insurance premiums – including your share of the premium for a family member who is covered by your health insurance plan.

Get a Health Insurance Premium Tax Credit

The health insurance premium tax credit is a refundable tax credit that helps eligible individuals and families cover the cost of premiums for health insurance purchased through the Health Insurance Marketplace also known as the Affordable Insurance Exchanges. The premium tax credit is based on a sliding scale. This means that it increases as your income decreases, so that those with lower incomes pay a smaller percentage of their income towards their health insurance premiums than those with higher incomes.

If you are eligible for the premium tax credit, you can choose to have some or all of it paid in advance to your insurance company to lower your monthly health insurance bill. To receive advance payments of the premium tax credit, you must enroll in a qualified health plan through the Marketplace. You will also need to estimate your annual income for the upcoming year and notify the Marketplace of any changes in your circumstances that might affect your eligibility for the premium tax credit or the amount of the credit.


The best way to calculate your monthly health insurance premium is to use an online calculator. These tools will ask you for some basic information, such as your age, gender, and zip code. They will then use this information to generate a list of quotes from different insurance companies. You can compare these quotes and choose the one that offers the best coverage for the best price.

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