Glossary

Premium

The amount you pay each month to your insurance company to keep your health insurance plan active, regardless of whether you use any care.

Last updated: May 11, 2026

The premium is the amount you pay each month to your insurance company to keep your health insurance plan active. You pay it regardless of whether you use any care that month.

If you have a Silver plan with a $400/month premium and you receive a $300 Premium Tax Credit, your net monthly cost is $100.

Gross premium vs. net premium

Gross premium: The plan’s full price before any subsidy. This is what you would pay with no subsidies at all.
Net premium (after subsidy): The gross premium minus your Premium Tax Credit. This is what you actually pay each month.

When you shop on HealthCare.gov or a state Marketplace, both numbers are shown. The net premium is what matters for your monthly bill.

What determines your premium

Insurers can only adjust premiums based on five factors under the ACA:

Age — Older costs more. The federal rule allows up to 3:1 ratio (oldest pays 3x what youngest pays).
Geographic location (rating area) — Premiums vary by zip code.
Tobacco use — Insurers can charge up to 50% more for tobacco users.
Plan category (metal tier) — Bronze cheaper than Platinum.
Individual vs. family enrollment — More people = higher gross premium.

Insurers cannot charge more for: gender, pre-existing conditions, medical history, occupation, or claims history.

Premium Tax Credit (subsidy)

The Premium Tax Credit (PTC) is the federal subsidy that lowers your monthly premium. Most Marketplace enrollees qualify for it. The amount depends on:

Your household income (lower income = bigger subsidy)
Household size
The cost of the second-lowest-cost Silver plan in your area (the “benchmark”)
Your age and geographic location

For 2026, there is an income cap again: the Inflation Reduction Act’s enhanced subsidies expired December 31, 2025, so households above 400% FPL get no Premium Tax Credit. Below that line the credit still does a lot of work — and it is largest at the lowest incomes, where many households pay $0 or near-$0 after the credit.

How is the PTC paid?

You can choose:

Advance Premium Tax Credit (APTC): The subsidy is paid in advance each month directly to your insurance company. Your monthly bill is lower. This is what most people choose.
At tax time: You pay the full premium each month and receive the credit as a refund on your tax return.

If your income ends up higher than estimated, you may have to pay some of the APTC back at tax time. If lower, you get extra credit back. Updating your income with the Marketplace during the year keeps your APTC accurate.

Premium does NOT count toward the out-of-pocket maximum

Your monthly premium is separate from your deductible, copays, and coinsurance. It does not count toward the out-of-pocket maximum. The premium is the cost of having insurance; the OOP max is the worst case you spend if you use a lot of care.

What if I cannot pay my premium?

You have a 30-day grace period before the plan is canceled.
If you have an APTC, you get a 90-day grace period before cancellation.
Once canceled for non-payment, you typically cannot re-enroll until the next Open Enrollment unless you have a qualifying life event.

Get a real premium quote — a licensed agent will show you premiums after subsidy in under 10 minutes.