The Average Cost of Family Health Insurance

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The average cost of family health insurance is rising. According to the Henry J. Kaiser Family Foundation 2014 Report, the average cost of employer-sponsored family plans was $16,834 annually -- up 3 percent over the previous year and 69 percent over 10 years ago. The amount workers contributed toward these plans also increased to an average of $4,825 annually. The cost for self-paid plans for families who do not receive a subsidy under the Affordable Care Act averaged $8,724 annually -- an increase of 9 percent in the 2015 enrollment period versus 2014, according to the eHealth Health Insurance Price Index. The average cost of family health insurance depends on several factors, including U.S. region, type of plan, and the amount families are willing to provide in co-pays and deductibles.

Regional Variations

Health insurance premiums tend to be higher in the Northeast and lower in the South. For example, the Kaiser study lists average total (employer plus employee contribution) annual premiums for employer-sponsored family insurance in the Northeast as $17,772, Midwest as $16,800, West as $17,067 and South as $16,170. EHealth's data shows similar trends. It lists the three states with the lowest premiums for unsubsidized self-paid plans as Arizona at $6,624, Tennessee as $6,768 and Iowa as $6,888. The states with the highest cost are Indiana at $11,304; New York at $12,120 and New Jersey at $12,276.

Types of Plans

Families that have high-deductible plans with a savings option pay less on average than those with health maintenance organization or preferred provider organization plans. High-deductible plans are those in which the family must reach a high-dollar threshold before the insurance company will pay toward the costs. These plans often have a health savings account option attached to them. HMO plans provide comprehensive coverage (and frequently no deductible) but only if the patient sees doctors and specialists that belong to that organization. PPO plans allow the patient to choose doctors but pay more if doctors are within their network. The total average cost for a high-deductible employer-sponsored plan is $15,401, while the total for an HMO is $17,383.

Other Factors

In general, the more medical expenses a family is able to assume itself, the less costly the insurance. In addition, if families are paying the total premium themselves, they are much more likely to choose a plan with high deductibles and high co-pays, with or without a savings option. For example, the average family buying insurance themselves chose a deductible of $7,760 annually. Among self-pay policies, the older the primary policy holder is, the higher the cost of the policy.

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