The Affordable Care Act, also known as Obamacare, refined what kind of insurance plan can be sold in the United States. The new qualified health plans that take effect in 2014 are sometimes referred to as "metal plans" since they are each named after a different type of metal (Bronze, Silver, Gold, and Platinum).
The four new metal plans are distinguished from one another by their "actuarial value." Actuarial value refers to the average amount of insurance expenses that would be paid for by the plan. The higher the actuarial value of a plan, the lower the out-of-pocket costs for the plan member. With respect to the plan names, the more expensive the metal, the higher the actuarial value. For example, a Platinum Plan covers 90% of covered medical expenses while a Bronze Plan only covers 60%.
In the market place, it is expected that an insurer will charge progressively higher premiums among the plans with Bronze Plans having the lowest premiums and Platinum having the highest premiums. However, this considers plans only within a single insurance company. It is possible that one company’s Silver Plan could be cheaper than another company’s Bronze Plan. All plans, whether Bronze, Silver, Gold or Platinum, will have a shared maximum out-of-pocket amount that an enrolled individual can pay in a calendar year.
All the plans must offer essential health benefits. These are the basic insurance benefits that all qualified health plans must provide enrollees. States have the discretion to require additional benefits beyond the Essential Health Benefits. However, these are minimum benefits and plans can choose to offer additional benefits if they so choose so long as the essential benefits are properly covered. It is also important to note that since plans differ by the amount of costs they cover, the aforementioned plans may all cover the essential health benefits but they can cost the member different amounts due to the differences in insurance expenses paid for by the plans. Below is a brief summary of the 10 Essential Health Benefits that all metal plans must offer:
Individual insurance companies are not required to offer all four plans. At a minimum, they must offer the Silver plan and the Gold plan. There is also a catastrophic plan for individuals who can demonstrate problems affording a Bronze Plan. This plan is only available through an exchange and tax subsidies cannot be used to reduce its premiums.
Some people have questioned why the metal health plans have the names that they do. Part of the reason is that the Affordable Care Act was based on an earlier health insurance reform in Massachusetts. The Massachusetts plans had the names Bronze, Silver, and Gold. Originally the marketing officer in charge of naming the plans was considering names with historical significance for Massachusetts such as "The Minute Man Plan" and the "Patriot Plan." However, after hearing the ideas his wife suggested that he use the name of the medals in the Olympics: Bronze, Silver, and Gold. She said that consumers would know instantly that a Silver Plan was better than a Bronze Plan and a Gold Plan was better than a Silver Plan.
The monthly premium for any of the four metal plans are based on several factors:
An additional consideration is the company providing the insurance. For example, the monthly premium for a Bronze Plan for a 30 year-old nonsmoking female in New Haven Connecticut will not necessarily be the same at two different insurance companies serving that region. It is always best to comparison shop plan premiums and benefits prior to enrolling. Premiums for metal plans can be compared on our health insurance premium quote page but the metal plan premiums won’t be available until this year’s open enrollment period.
As of the time of this article’s most recent update, most individuals will face a fine in 2014 if they do not have health insurance. The fine amount will increase annually until 2016 when it will be adjusted of the cost-of-living. This insurance can be provided by an employer, purchased privately, or be a public health plan like Medicare or Medicaid.
An insurance company, a health insurance exchange, or an insurance broker can sell insurance. HealthPocket’s health insurance premium comparison tool includes links to various organizations that sell insurance for people who have made a choice of which insurance plan they want to purchase.
Yes. Insurers are permitted to change their formularies throughout the year as long as those formulary modifications remain compliant with Essential Health Benefit requirements. Moreover, Affordable Care Act regulations require every formulary to include (at a minimum) the greater of one drug in every USP drug category and class or the same number of prescription drugs in each category and class as covered by the benchmark plan chosen by a state. Insurers are not required to submit updated drug lists to HHS throughout the year by may be required to do so for states where the federal health insurance exchange is not used.