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If you buy health insurance independently instead of obtaining from an employer or government program, your monthly premiums will increase markedly as you get older. As you approach retirement, in fact, you’ll find yourself paying premiums up to three times what younger insured people pay for plans. An estimate from the Urban Institute, for example, indicates that average payments for monthly premiums were $1,081 at age 64, while those at age 30 paid only $422. Health insurance costs can take a big bite out of retirement income. Talk to a financial advisor to plan ahead.
The Affordable Care Act empowers health insurance companies to incorporate age when calculating premiums. This is based on the idea that older people are more susceptible to illness and injury and so can reasonably be charged more than younger policyholders. However, rather than permitting insurers limitless increases in premiums charged to older insured people, the law caps age-based premium increases. Using the rate charged to a 21-year-old, insurers can only charge a 64-year-old up to three times as much for a given plan.
Some states use lower maximum ratios. Two states, Vermont and New York, prohibit age-based multipliers. In these states, older purchasers of health insurance pay the same as younger ones.
The 3:1 ratio limit of the federal guidelines applies only to 64-year-olds. Insurers are limited to smaller multipliers for buyers at younger ages. For example, under the federal guidelines, a 40-year-old male can be charged a rate 1.278 times the rate charged to a 21-year-old. Multipliers are generally modest until middle-age, when they begin to rise rapidly as older consumers are asked to pay increasingly larger monthly premiums when compared with younger people.
In 2024, Kaiser Family Foundation data experts figured the average 40-year-old paid $477 monthly for benchmark Silver plans on ACA marketplaces (estimated at $497 for 2025). These policies represent the second-least expensive option among Silver-tier offerings. There is no similarly available data for national averages for premiums paid by people at other ages. Nor are there published estimates of a national average for the base rate paid by a 21-year-old. However, it’s possible to generate estimates for these figures using the Kaiser Foundation estimate for a 40-year-old and the allowable parameters for rate-setting.
