As part of the rollout of the Affordable Care Act (also known as Obamacare), millions of people who do not receive health coverage through an employer or the government are expected to buy their own health insurance through the healthcare exchanges. If you are planning to start shopping for your own health insurance, you'll see four categories of options named after metals.
Each of these plan types is a qualified health plan (QHP). This system is a simple way to let you know what percentage of your healthcare costs each insurance option will cover. Each plan level covers the same essential health benefits. The difference comes in how much of your healthcare costs you will have to pay on average.
Here are the coverage levels:
- Bronze: plan covers 60% of eligible healthcare costs, you pay 40%
- Silver: plan covers 70% of eligible healthcare costs, you pay 30%
- Gold: plan covers 80% of eligible healthcare costs, you pay 20%
- Platinum: plan covers 90% of eligible healthcare costs, you pay 10%
Insurance companies do not have to offer all four levels of coverage. However, they must offer at least one silver level plan and one gold level plan to participate in the health insurance marketplaces.
What Do These Plans Cover?
The Affordable Care Act (ACA) requires that all plans cover a range of care categories. These are essential health benefits. However, the law does not define specific services, amounts, or duration of care. So it is important to read through the details of each plan. The 10 categories of essential health benefits are:
- Ambulatory patient services
- Emergency services
- Maternity and newborn care
- Mental health and substance use disorder services, including behavioral health treatment
- Prescription drugs
- Rehabilitation or habilitation services and devices
- Laboratory services
- Preventive and wellness services and chronic disease management
- Pediatric services, including vision and oral care
The Internal Revenue Service (IRS) administers the tax provisions in the ACA and has a list of QHPs in each state. Check for your state’s information at http://www.irs.gov/Individuals/HCTC:-List-of-State-Qualified-Health-Plans.
Another Option: Catastrophic Plans
If you are under 30 and generally healthy, you may want to consider a catastrophic plan. These plans have very low premiums and cover three primary care visits per year plus preventive services. However, you will pay for all other medical costs up to a certain amount, which can be thousands of dollars. Catastrophic plans will protect you from worst-case scenarios. They are only suitable for people who do not generally need to use many healthcare services.
To enroll in a catastrophic plan through an insurance marketplace, you must be under 30 or show that you cannot afford other insurance options.
Figuring Out Which Plan Is Best for You
No matter what plan you pick, you will have costs. That starts with your premium, the amount you'll pay each month for your insurance. You will also have out-of-pocket costs, such as co-pays when you receive services. A bronze plan will have the lowest monthly premiums, but the highest out-of-pocket costs. A platinum plan will have the highest premiums, but the lowest out-of-pocket costs.
You also should compare deductibles because they will vary from plan to plan. A deductible is the amount of money you must pay before your insurance begins to pay. For example, a $500 deductible means that you must pay $500 of the medical expense before your insurance starts to pay. For a $3,000 medical bill, you would pay your $500 deductible and the insurance company would pay the remaining $2,500.
Another important consideration is finding a plan that meets your specific health needs. This is especially important if you have a chronic condition or are at a high risk for health problems.