Enacted in 2010, Obamacare, also known as the Affordable Care Act, was created in an effort to make health care in the US more accessible and affordable. The law created a federally regulated health insurance marketplace and defined the types of coverage that all health plans sold in the marketplace must include.
Minimum Coverage Requirements
Some key requirements of every health plan sold in the health insurance marketplace are:
- Outpatient Care: Another name for this is ambulatory patient services. This covers doctor and clinic visits, and some home health visits. You can go to health care.gov to see a full list of what this covers.
- Emergency Services: This will include things like emergency room visits and ambulance transportation. This also covers care from an out of network hospital or medical provider in an emergency.
- Inpatient Care: The opposite of outpatient care, this covers your treatment in a hospital. This includes, doctors’ visits, hospital stays, surgeries and transplants, limited stay in a nursing home, and more.
- Maternity Care: Women will get assistance with their pregnancy, labor, and newborn care.
- Mental Health and Addiction: All plans offer some coverage for behavioral treatment, counseling, and psychotherapy.
- Prescription Drugs: Every health care plan offers prescription drug coverage.
- Rehabilitation Services: Physical and occupational therapy are now covered. In addition to rehab services, some rehabilitation devices are also covered.
- Laboratory Services: This includes medical testing to diagnose illness or disease. It also covers some preventative screenings.
- Preventative, Wellness, and Chronic Disease Services: This will include physicals, some cancer screenings, immunizations, and more.
- Pediatric Services: This will even include vision and dental services for children.
With these new requirements, all plans offer the same minimum amount of coverage.
However, there are plans that offer different levels of coverage beyond the minimum amount. Obamacare lingo usually refers to these as “metal plans.” There are bronze, silver, gold, platinum, and catastrophic plans.
*Actuarial value is the average portion of typical medical expenses covered by the plan.
| Cost Type | Bronze | Silver | Gold | Platinum | Catastrophic |
|---|---|---|---|---|---|
| What your Health Plan Covers (*Actuarial Value) |
60% | 70% | 80% | 90% | <60% |
| Your Out-of-Pocket Costs | 40% | 30% | 20% | 10% | >40% |
| Premium Payments | Low | Low | High | Highest | Lowest |
| Deductibles | High | High | No | No | Highest |
Each plan has what’s called an “actuarial value”. This is the percentage of costs that each health plan covers, as opposed to what plan holders will pay out of pocket. For example, bronze plans have a low actuarial value, while platinum plans have high ones. With a bronze plan, you will end up paying more out of pocket than with a platinum plan, but a platinum plan will have higher premiums.
Bronze
A bronze health plan will pay around 60 percent, and you will pay around 40 percent of your health care costs on average. It has the lowest monthly premiums out of all of the metal plans. However, you will be paying more out-of-pocket medical costs than with a Silver or Gold plan.
Out-of-pocket costs can vary, but they are usually things that your health plan doesn’t cover. This can include some prescription drug expenses, visits to specialized doctors, if you use doctors or facilities out of your health care plan, and anything else not covered under your plan.
Bronze plans work well for those who don’t have a lot of medical expenses. However, if your medical needs change, you won’t be able to change your plan until annual open enrollment. The one exception is if you qualify for the special enrollment period.
You can qualify for the special enrollment period if you get married, have a baby, have a change in household income, lose health coverage, have a hardship, or similar circumstances.
Silver
Silver plans are a step up from the bronze plan. This health plan will pay an average of 70 percent of your health care costs, and you will pay the remaining 30 percent. Your premium will be a little higher than the bronze plan’s, and your out of pocket costs will be a little lower.
There are many perks to the silver plan. One of them is that you may be able to get cost sharing reduction subsidies (CSR).
- Cost Sharing Reduction Subsidies: These are subsidies that will lower your out of pocket cost for health care. If you make 100 to 250 percent of the federal poverty level, you qualify for CSR.
- Tax Credits: You can also get tax credits with a silver plan. If you make 100 to 400 percent of the federal poverty level, you can get tax credits. They will lower your premium.
Silver plans are the only Obamacare health plan where CSR and tax credits can be used together. This is why many experts suggest the silver plan as the best metal plan in terms of “bang for the buck”.
If you are having trouble finding a good deal in the health insurance marketplace, you can always request a quote from multiple health insurance companies licensed by your state, through QuoteWizard.
Gold
With a gold plan, your health plan will pay around 80 percent of your health care expenses, and you will pay the other 20 percent. The downside is that you will be paying higher premiums than with a bronze or silver plan. However, you can use tax credits with a gold plan to reduce your premiums.
When considering a gold plan, you should look into your medical costs from the past year. You probably don’t want to choose this plan if you don’t require medical care very often, otherwise you’ll be paying relatively high premiums without reaping the benefits.
Platinum
Platinum plans are a step up from gold plans, and have the highest premiums out of all the plans. Your health plan will pay around 90 percent, and you will pay around 10 percent. You can also use tax credits with a platinum plan, but you won’t get as much of a discount on your premium as you would with other metal plans.
Platinum plans are recommended for individuals and families who require a great deal of medical care.
Catastrophic
These plans usually pay less than 60 percent of your health care costs. Unlike the metal plans, you can only get this plan if you are under 30 and can’t afford health care on your own. You can also get it if you have a hardship exemption.
To get a hardship exemption you must meet federal requirements. These are being homeless, filing for bankruptcy, your state not expanding Medicaid, and a few more reasons.
Catastrophic plans have low premiums, but high deductibles. They do provide the minimum health coverage. However, they do not offer as much coverage as the other metal plans.
FREQUENTLY ASKED QUESTIONS
Q: How do I determine which plan is best for me?
A: You want to weigh which plan to choose on the amount of time and money you usually spend at the doctor. If you spend a lot of time at the doctor, you should consider a gold or platinum plan. If you spend little time at the doctor, you might consider a bronze or silver plan.
Keep in mind that your health is constantly changing, and you want to be able to account for that. Open enrollment only comes around once a year. The special enrollment period is only granted under certain circumstances. For this reason, you should take that into account.
Q: Can my insurer use medical underwriting on me during the Obamacare open enrollment period?
A: Insurance companies operating in your state or federal marketplace can’t use medical underwriting during the open enrollment period. Medical underwriting is a process where policy providers will use pre-existing health conditions to determine your premiums.
However, insurers can use information such as smoking history, geographic location, income, and age when determining your rates.
Q: How do I shop for a plan in the health insurance marketplace?
A: During health care open enrollment, you will check out your state’s health insurance exchanges. Different states will offer different plans and different providers, so it is important to shop within your state.
If you are changing plans, you want to make sure that your new plan covers your current health care provider(s). If you are enrolling in a plan for the first time, you want to make sure your plan has an extensive list of highly rated providers and health services.
References:
- Obamacare: Which 'Metal' Tier Is Right for You?
- The Types of Health Insurance Plans Sold On and Off of ObamaCare’s Marketplace
- Metal Plan Levels in the Health Insurance Marketplace
- Comparing Health Plans
- ObamaCare Essential Health Benefits
- Health Savings Account (HSA)
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