Understanding Obamacare: Bronze, Silver, Gold and Platinum

It’s less than two weeks before the state online marketplaces open for business as part of the Affordable Care Act, widely known as Obamacare. Have you decided which level of health insurance you’re going to buy? Your choices are bronze, silver, gold and platinum.

As the names suggest, bronze has the cheapest premiums and, as a result, the highest out-of-pocket costs among the four plans. On the other end, platinum has the highest premiums and the lowest out-of-pocket costs for health care.

How do you decide? Money Talks News founder Stacy Johnson explains more about your choices in the following video. Check it, then read on for more details about the plans.

First, keep in mind that if you get health insurance through a work-based group plan (and most Americans do), this will likely have no bearing on your life, unless your employer’s plan is deemed unaffordable for your income. The online marketplaces where the so-called “metal plans” can be bought are intended for those who are uninsured or who have individual coverage and may want to shop for a better deal. They’re also for businesses with 50 or fewer employees.

If you get your health care through a government plan like Medicare or Medicaid, you can also tune this out.

Second, the marketplaces are merely a way to simplify the process of buying health insurance. You’ll be purchasing insurance from many of the same companies that sell it now, plus perhaps some new cooperatives and nonprofits. This is not a government insurance plan.

Third, your premiums will vary not just by which metal plan you pick but also by your age and where you live. However, under Obamacare, insurance companies can no longer set higher premiums for women and can no longer charge someone more or refuse to sell them coverage because of a history of health problems.

Fourth, it’s important to remember that many of those who buy insurance through a state marketplace will be eligible for a subsidy in the form of a tax credit, which can be applied directly to the monthly cost of the premiums. You have to make a good income – more than $45,960 for individuals and $94,200 for a family of four in 2013 — not to qualify for some kind of help with the cost. You won’t know your actual subsidy until the marketplaces open, but we’ve provided the Kaiser Family Foundation’s calculator below to give you some idea. Depending on your income, the subsidy could substantially reduce what you pay for your premium.

Finally, regardless of which plan you pick, you’ll be provided with certain health benefits, like maternity care, prescription drug coverage and mental health care. In fact, the Affordable Care Act raised the bar for the kinds of care every health insurance policy – both individual and work-based group plans – must provide. Says HealthCare.gov:

All marketplace insurance plan categories offer the same set of essential health benefits. The categories do not reflect the quality or amount of care the plans provide.

However, you’ll need to examine the details of each plan to see if they meet your health needs. Says WebMD:

Plans differ by the services they provide for each benefit. For instance, one plan may cover more prescription drugs. Only some plans may include bariatric surgery under hospital care. And not all plans will cover in-vitro fertilization under maternity care.

How do you decide?

Which plan is best for you? You’ve got to consider your budget and your expectations for how much medical care you’ll need in the coming year. HealthCare.gov suggests you ask yourself this question:

Do you expect a lot of doctor visits or need regular prescriptions?

  • If you do, you may want a Gold or Platinum plan.

  • If you don’t, you may prefer a Bronze or Silver plan. But keep in mind that if you get in a serious accident or have an unexpected health problem, Bronze and Silver plans will require you to pay more of the costs.

When you’re doing the math, understand there are limits to how much you’ll pay out-of-pocket for certain expenses. The Washington Post says:

Annual cost-sharing, or the amount consumers must pay for co-payments for medical services and deductibles, will be capped at $6,350 for individual policies and $12,700 for family plans in 2014.

Here’s some more information about each type of metal plan:

Bronze

Bronze plans cover on average 60 percent of your medical costs, leaving you to pay for 40 percent out-of-pocket. Thus, these plans have the lowest premiums. However, prices will vary. For instance,

  • In Vermont, the lowest-priced bronze plan for a 25-year-old will cost $264 a month (before the tax credit subsidy).
  • In Oregon, it’s $130 for a 25-year-old.
  • In Billings, Mont., it’s $437 for a 60-year-old.
  • For a 60-year-old in Indianapolis, it’s $531.

Because the tax credit is based on your income, your family size, where you live, and also the cost of the second lowest priced silver plan on your marketplace, applying that subsidy to a bronze plan could greatly reduce your monthly bill. However, a big health crisis could be tough on your finances.

Silver

The silver plans will cover on average 70 percent of your medical costs.

Here’s another point to consider: Additional federal subsidies to help lower-income families with co-payments and other out-of-pocket expenses are available only to those enrolled in a silver plan. People who earn up to 250 percent of the federal poverty level — $28,725 for individuals and $58,875 for a family of four — are eligible for those subsidies.

Gold

Gold plans will cover on average 80 percent of your medical costs.

Platinum

Platinum will cover 90 percent of your medical costs, and thus have the highest premiums. Marketplaces aren’t required to offer this plan, so your state might not have one.

Catastrophic plans

There’s another option for people under 30 and those whose income is considered too low to buy a policy (and too high to be eligible for Medicaid). If you meet the conditions to qualify, these plans will be presented to you when you fill out an application on your state marketplace’s website.

These plans come with higher deductibles and lower premiums than the other plans. That means you’ll spend a lot more out-of-pocket if you do have a catastrophic health issue. You will be entitled to three free doctor’s visits as well as the other free preventive care mandated by Obamacare.

Buying a catastrophic plan means you won’t be eligible for a subsidy to help pay the premiums.

Other things to consider

Picking from among bronze to platinum isn’t the only choice you’ll have to make when the marketplaces open on Oct. 1. You’ll also have to chose from the health insurance companies offering plans in the metal level you’ve picked. You may also have the option to select, say, a health maintenance organization vs. a preferred provider organization. Note: If you want to keep the doctor you have now, make sure she’s included in the network of the plan you pick.

And this is not one size fits all from state to state. Your state will have options unique to it, and they may vary depending on where in the state you live.

For instance, only two organizations — a company and a nonprofit — planned to sell insurance on Maine’s marketplace, the Bangor Daily News reported last month. (These details were not yet set in stone.) Neither will offer a platinum plan. The insurance company will offer a “point of service” plan that includes all hospitals only in northern Maine and a separate plan for southern Maine that’s an HMO and excludes some hospitals. The nonprofit is offering its plans statewide.

The nonprofit will charge smokers and nonsmokers the same rate; the other will charge smokers 30 percent more, which is permitted under Obamacare.

Health insurance purchased via a marketplace by mid-December will begin coverage on Jan. 1. The deadline to buy insurance on a marketplace for 2014 is March 31, unless you have a life-changing experience like moving or divorce. You can find out where and how to apply at HealthCare.gov. Are you ready? Share your thoughts on our Facebook page.

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Comments & discussion

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  • Michelle

    Charging smokers more for health insurance insurance is flat out discrimination! What about the millions of people with bad health choices? Fat people, drinkers, drug addicts. I am a 58 yo woman who has smoked all her life. I have never consulted a doctor for a respiratory issue, no major health issues all my life. Why do I have to pay more than a person that eats at McDonald’s every day and weighs 300 lbs? Or the 20 yo that parties every night and drinks like a fish? I don’t drink, exercise daily, eat healthy and I have to pay more??? Discrimination!!!!

    • braunfels

      Michelle,
      You’re choice to continue smoking at your age makes you an extremely high risk person for all types of cancer, heart diseases, and respiratory problems. You have been extremely lucky (so far) to not have had any of these afflictions, but you will sooner, rather than later. You should be shopping for funeral and burial plans along with a health insurance plan.

      • Michelle

        I agree that at some point I’m going to have health issues from smoking however what about all the people that have ongoing issues NOW with diabetes, liver disease and all the issues that come from being overweight or drinking/doign drugs? They cost the health care system more than I do.

        • braunfels

          Two or more wrongs don’t make a right. Alcohol, drug abuse being overweight = all bad. And, so is smoking. Quitting isn’t easy…I know because I tried many times over a 30 year period. I finally got the incentive to quit for good when I was diagnosed with cancer that was related to smoking. Hope you don’t wait that long.

          • Michelle

            But what about the health care discrimination? Why are only smokers being penalized?

          • braunfels

            Michelle, you’re in denial and have a lot more to worry about than what you think is discrimination.

        • Enough is enough

          When asked? Do you smoke….NOPE! Never did, don’t plan on it…… dilemma solved!

  • Nancy

    I’m a 63 freelance writer who pays a lot for an individual health insurance policy. I’ve actually considered taking a risk and dropping insurance for the year before I qualify for Medicare. So recently I checked out the California Exchange called Covered California. The website is very clear and very easy to use. Into the calculator, I put in the number of people in my household, our household income, and the number and age of adults to be covered. Up came my options, along with some recommendations with explanation. Comparing and selecting insurance should always by this easy! Hurray for the Exchange.

  • cdm

    Obama needs to go right now ,he needs to be impeached and this is all over the face book site .he and all those dumb ass people he calls his back up democrats ha ha losers need not be voted back into office if u know what is good for you who voted for Obama because he was black .this Obama care is a real joke i have used it all ready and ks of personal info has been outed by this crap insurance personal info ,because it is so hard to get up and understand ..losers we r for taking this crap

    • Vito V

      Yeah when Romney implimented the plan in MA it was the greatest thing since sliced bread. Now that Obama wants
      to impliment it on a national level it has become the work of the devil. Get your head out of your partisan arse.

      • A. Lincoln

        Who mentioned Mitt Romney?

  • A. Lincoln

    If Obama had created national health CARE that paid 90% to 100% for everyone, that would have been a real accomplishment. We could have lively debates about whether it was better than a free market solution (and whether a free market in health care actually exists). But we didn’t get that. We got enforced corporate health INSURANCE that costs as much as an extra car payment every month and only pays 60% of costs. Nine out of ten of us can’t afford to buy it, and we certainly can’t afford to use it. The only thing we can do is refuse to take part. Opt out. Don’t buy the insurance; pay the penalty instead. If enough of us do that, the whole program will die. Remember: four Supreme Court Justices called Obamacare unconstitutional.

  • A. Lincoln

    If you are required to buy insurance under Obamacare and do not, you will owe a fine. That fine will be withheld from your tax refund. You do not give up your entire refund. The fine in the first year (2014) is very small–less than one month’s insurance would cost. In the second year, it is higher, but still cheaper than buying the insurance. If enough of us opt out during the first two years, the program will die. Congress and the president to be elected in 2016 will be forced to revoke the law for lack of funding.

    The way Obamacare is currently written, the government’s only method of collecting the fines from you is by taking it out of your tax refunds. If you properly arrange your tax withholding from your paycheck at work, you can manage never to be owed a refund.

    As far as your question about being required to enroll, note that part-time versus full-time status is not a factor–income is. Take a look at the Wikipedia article on Obamacare, section “Effective January 1, 2014.” A chart there shows the level of income at which you are supposed to enroll.

    • Lisa

      Thanks for the information! It has cleared things up some. Regardless of the fine, I will not be taking part in Obamacare. This has made me very unhappy! ….and a little sad.

  • obamathemarxist

    Who ever gets refunds, I don’t and I am on Social Security and a retirement annuity. When I worked I kept my withholdings low so that my tax liability would be as close to 0 as possible without giving the Govt an interest free loan. For a different perspective try reading this link; http://americandoctors4truth.org/template.html
    Obamacare or ACA is so bad that our congressmen have exempted themselves from it, exemptions have been given to a lot of Obama’s corporate and union supporters. Over 2000 pages long that none of the people who voted for it ever read it, a bill that contains 24 or more new taxes, a bill when they passed it was to cost 900 billion, now the CBO says will cost 1.7 trillion, even after implementation their will still be uninsured, some estimate 30 million.

    This website has been shilling for this mess instead of looking at better methods of fixing the problems. This next link shows the bad news;;http://www.ijreview.com/2013/09/81096-explosion-healthcare-premiums-founding-fathers-apparently/

  • chedd

    As a self-employed person whose wife has a pre-existing condition, I’m paying nearly $2,000 per month on the individual insurance market for myself and family. It is absurd; it is out of control. Although I make a decent living, the cost of health insurance makes saving for retirement and college for the kids impossible. I cannot wait for Obamacare lighten the load and, hopefully, put the health insurance industry vultures out of business – and the sooner the better.

    In 1960, health care costs were about 5% of GDP; now they are 18%. That’s nearly one-fifth of our economy!. Not only insurers, but hospitals, pharma and doctors have been sucking the blood of our productivity for too long. If you haven’t gotten a raise for the past several years, and have been wondering why, blame your health insurer and the medical industrial complex.

    When we (hopefully, eventually) move to a single payer system, like Medicare for all, the entire economy will lose that dead weight and we shall see a burst of economic energy the likes of which we’ve not seen since the Internet Boom 1.0, or even the post-WWII era. And it can’t happen soon enough. Obamacare ain’t perfect, but it’s definitely a step in the right direction – which you can tell because everyone who’s gotten rich off the sick and the dying for the past 20 years is working so hard to prevent it from happening,

  • Julie60

    You should apply for “Medicaid” if your part-time and low wages..there is an income limit, and you just might qualify, let the State pick up the tab and then you have Health Ins. for just in case you need it, and you won’t be fined or have to worry about your tax refund.

  • Pat Boles

    I have a question about this subsidy. I will probably make around $13.000 or little more this year, and I was reading that the subsidy is only available to those who make $40.000 or more. Am I reading this right? This income range can afford this crap more than I can and they will get help to pay for it??