Chelsey Tucker graduated with a Bachelor of History degree from Metropolitan State University in 2019. She now writes about insurance with her specialty being life insurance and has been quoted on Help Smart Phone and MEL Magazine.

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Dan Walker graduated with a BS in Administrative Management in 2005 and has been working in his family’s insurance agency, FCI Agency, for 15 years. He is licensed as an agent to write property and casualty insurance, including home, auto, umbrella, and dwelling fire insurance. He’s also been featured on sites like

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Reviewed by Daniel Walker
Licensed Auto Insurance Agent Daniel Walker

UPDATED: May 17, 2022

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The lowdown...

  • Health insurance costs in the U.S. are higher than in comparable nations
  • Medical care costs more in the U.S. than in other similar advanced societies
  • Health insurance has layers of costs for consumers
  • Healthcare reform added coverage and content requirements to every health plan

Health insurance costs are high in the U.S. compared to other countries.

In the decades since WWII, health care costs have risen and sometimes in alarmingly large amounts. In the environment of rising health care costs, insurance companies have raised prices both to cover costs and to increase profits.

Public health care programs had lower rates of increase than private insurance during periods when public insurance covered a far more burdensome population of sick, elderly, and economically disadvantaged applicants.

If you’re looking to lower your health insurance rates, enter your ZIP code above and compare at least three to four policies today!

What was health insurance like before the Affordable Care Act?


Health insurance prices rose at alarming rates in the decades before the Affordable Care Act. A major impetus for the reform law was to take control of insurance pricing and acceptance conditions away from the commercial sector.

The profit motive and risk avoidance were so overwhelming that people had no fair opportunity to get effective insurance.

Nearly half the population was excludable for a prior sickness or condition including the state of being of child-bearing age.

Prices were high, and in a limited number of states and areas that required every applicant to have health insurance, prices rose to unsustainable levels.

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What did the Affordable Care Act achieve?


The ACA was one of the rare laws in U.S. history that had profound and life-altering impacts on nearly everyone in the population.

Obamacare directly affected most of the U.S. economy and more than three hundred million Americans.

The sweeping reforms changed health insurance for everyone, and it branched into traditionally uncovered groups, providing services for:

  • Health finance
  • Facilities
  • Medical care
  • Medical research
  • Insurance coverage

The Act did not achieve universal coverage, but it took a large step towards national health insurance and social insurance. The law has three primary goals: to make affordable health care coverage available to more people (the law provides consumers with subsidies that lower costs for people with household income between 100% and 400% of the FPL), expand the Medicaid program to cover all adults with income below 138% of the FPL, and support innovative medical care delivery methods.

The Individual Mandate

Obamacare requires every eligible resident to get and keep qualified health insurance coverage.

The Congress established this rule to get the maximum feasible number of people to participate in health insurance. The rule applies to people without regard to prior health, current condition, and age.

The biggest exception to the individual mandate goes to economics; the law does not require participation from those without a minimum level of income. The law does not apply to persons below the annual income tax filing threshold.

The Guarantee Issue


Obamacare required everyone to get insured. It required every insurer to accept applicants.

The guarantee issue was not absolute; the acceptance policy applied only to qualified applicants.

Obamacare Marketplace and state exchanges require a minimum income to qualify. Applicants must have the ability to pay for private insurance coverage.

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What does qualified health insurance offer?

Qualified health insurance meets the requirements of the Affordable Care Act for value and coverage. Qualified insurance offers some protection against unlimited expenses.

The qualified insurance needed to avoid the tax penalty consists of the below-listed elements:

  • Minimum actuarial value
  • Minimum essential coverage
  • Ten essential health benefits
  • Limits on expenses

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Are consumer payments and expenses high?

The feeling that health insurance is too expensive derives in part from the layers of payments that consumers must make. In some types of insurance, consumers just make a contract and pay health insurance premiums.

Health insurance is different, and premiums are only the beginning. Each service and benefit carries a separate charge which can occur at any time.

The below-listed items explain expenses and ways to reduce them.

  • Deductibles — Plan subscribers must pay a deductible to get insurance cost sharing. Deductibles can range as high as $7,200 for an individual. For people with low or moderate medical needs, the Health Savings Account will pay for out-of-pocket costs using pre-tax dollars, which reduce taxable income and causes further savings.
  • Copayments — Consumers pay this at the point of getting an insured benefit or service. The copays do not reflect the value of the service; rather, they are fixed payments such as a $40 office visit fee. Some plans such as EPO plans feature few and low copayments
  • Coinsurance — The consumer’s share of the costs of covered essential benefits. They pay 40 percent or less on average for all types of Obamacare plans. Coinsurance is lower with high premium plans. Moderate to high demands for medical care favor low coinsurance plans like the gold and platinum plans. The Health Savings Accounts pair with high deductible silver plans to pay expenses.
  • Out-of-Pocket Expense — Consumer spending in connection with getting health insurance benefits and services. The plans must limit out-of-pocket expenses on a yearly basis. Once past the expense limit, the insurer must pay the entire costs of covered benefits.

How to lower the costs of health insurance


The four policy types of Obamacare offer a starting point for finding low-cost solutions to healthcare needs.

Actuarial value is a basis for comparison. Features and costs are also important considerations.

The goal is to find the highest value at the lowest possible price. Comparison shopping is the first line of defense against high costs of health insurance.

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Employer costs assistance

Employers can assist employees and covered dependents with the costs of health insurance.

Many employers contribute to the premium payments and go further to assist with out-of-pocket costs.

The account-based types of support have the added feature of employee controls over the time, place, and occasions for health care spending. For example:

  • Flexible Spending Account (FSA) — These employer funded accounts provide funds for employee use to pay medical expenses.
  • Health Reimbursement Arrangements (HRA) — Funding accounts that go along with qualified health coverage. Employers provide funds to reimburse employees for medical expenses.

Low costs for self-employed

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Self-employed Americans have an incredible opportunity to get and keep qualified health insurance while reducing taxable income.

The self-employed health insurance tax deductions permit deductions for premiums, expenses, and related costs for the self, spouse, and dependents.

If one takes advantage of the deductions, then one can manage the marketplace costs of health insurance. The deductions offset the tax obligations that would have occurred without the self-employed health insurance deductions.

Political interference

Obamacare built in some tremendous resources to create competition and lower costs. One such device was the COOPs or consumer operated and oriented programs.

The ACA set up seed money loans and vital risk corridors to promote new health care providers to compete with private insurers. With no profit motive, the COOPS promised to upgrade health care and create badly needed competition.

The insurance industry supported action in the Congress that stopped the program by canceling the risk corridors. The ACA had previously provided risk corridors to private insurers to cover the initial years of operation and protect them against losses.

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Is health insurance costly?


In the U.S., health insurance is costly and complex. The nation has not committed to universal coverage, and private insurance providers dominate the field although with restrictions and standards that favor consumers.

Consumers must navigate the field of plans and programs to find low-cost solutions for required health insurance coverage, and more importantly, for their health and financial protection.

Comparison shopping can help consumers find the lowest price in health plans that respond to their needs and preferences.

Start comparison shopping for better and more affordable health insurance today! Enter your ZIP code below!