The average cost of private health insurance hit a record high of $7452 per year as health insurance gets more expensive in 42 states, ValuePenguin.com finds.
CHARLOTTE, N.C., Dec. 3, 2024 -- In 2025, private health insurance plans will cost an average of $621 per month, or $7,452 per year - rising 7% from 2024 according to a new report from insurance research site ValuePenguin.com. Four consecutive years of rate increases led to a 15% increase in health insurance premiums since 2022. Residents of 42 states will see higher premiums in 2025 - driven by the rising cost of medical care around the country.
- Every type of private health plan will see premiums increase in 2025. Platinum tier plans, Catastrophic plans, EPO, HMO & PPO plans, will see the largest increase in premiums ranging from 8% to 13%.
- In 2025, health insurance will cost the most in Vermont, Alaska and New York. Premiums in these states will be 86%, 75% and 67% above the national average. New Hampshire, Maryland and Virginia, will have the cheapest health insurance with premiums 32% - 40% below the national average.
- 8 states will see insurance rates increase by more than 10%. Vermont will see the largest rate hike of 27%, followed by New York, Alaska, North Dakota, Michigan, Utah, Montana, and New Mexico. Vermont's 27% rate increase will mean health insurance in the state will cost a record $13,884/year ($1157/month) - the highest in the country.
- Six states will see slight decreases in health insurance premiums. The biggest decreases will be seen in Iowa, South Dakota and Alabama, falling 7% to 3% in 2025. Tennessee, and North Dakota health plans will experience no rate changes in 2025.
- Despite high costs, over 90% of enrollees qualify for subsidies which will lower the cost of their health insurance plan by over $800. 4 in 5 Enrollees will pay under $10/month for health insurance with subsidies. And 97% of insurance shoppers will be able to compare plans from three or more health insurers for 2025 to find a plan that works for their needs and budget.
ValuePenguin.com health insurance expert Divya Sangameshwar said, "Private Health insurance premiums are rising 7% in 2025, due to ballooning healthcare costs - which get passed on to policyholders in the form of higher premiums, However, most health insurance plans purchased from HealthCare.gov or state marketplaces receive rate subsidies, which significantly lower the monthly premiums that enrollees pay."
She adds, "In 2021, the American Rescue Plan introduced a program of enhanced health insurance subsidies which lowered premiums for every enrollee, and capped premiums at 8.6% of income. If congress does not extend the enhanced health insurance subsidies program, which is set to expire in 2025, millions of Americans can expect a steep increase in how much they'll pay for health insurance in 2026 and beyond."
For the full report, please visit: https://www.valuepenguin.com/average-cost-of-health-insurance
Health Insurance Subsidy Calculator: https://www.valuepenguin.com/aca-subsidy-calculator
About ValuePenguin.com: ValuePenguin.com and its parent company, LendingTree®, have a common mission: to empower consumers with tools, information, and resources to help them make smarter, more informed financial decisions. For more information, please visit www.valuepenguin.com, like our Facebook page or follow us on Twitter @ValuePenguin.
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