When Oct. 1 arrives, the state online marketplaces will enable people to shop among the four health insurance "metal" plans. Here's what you need to know to make your selection.
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 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.
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 plans will cover on average 80 percent of your medical costs.
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.
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.