What Is a Health Insurance Premium?

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A premium is the amount you pay to have health insurance coverage.

It is commonly paid monthly, although payment arrangements can vary.

For example, if your monthly premium is $250:

$250 × 12 months = $3,000 per year

That $3,000 is the amount you pay for the insurance itself before considering other costs you may have when receiving medical care.

A plan with a lower monthly premium isn’t automatically the cheapest option overall. A lower-premium plan may have a higher deductible or higher costs when you use health care. HealthCare.gov recommends comparing estimated total yearly costs rather than looking only at the premium.

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