It makes sense to plan ahead for the cost of health insurance. It is not surprising that I often receive questions about how much medical insurance will cost when I graduate, after I am divorced or when I leave a job to start a business. Fortunately,the Affordable Care Act includes a provision designed to keep health insurance cost limited to a fixed maximum percentage of your gross income.
For general planning purposes, expect individual health insurance to cost just less than 10% of your gross income and out-of-pocket costs will add another 6% for a total of 16% of your gross income. So the national average health insurance cost is about 16% of gross income.
Some people say “wow, that’s a lot. How much is the penalty if I don’t have health insurance?” I respond “about 2% of your gross income” and typically hear “wow, that’s a lot less”. Therein lies one of the problems.