Bronze Plan – Affordable Care Act (Obamacare)

11-21-2014

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Bronze Plan – Affordable Care Act (Obamacare)

What is a bronze plan?

The Affordable Care Act, otherwise known as Obamacare, requires traditional health insurance companies to offer four standard categories of plans to those consumers who purchase their coverage privately: Bronze, Silver, Gold, and Platinum. These plans will all offer a minimum standard of benefits determined by the government. This minimum standard is known as the plan’s "essential health benefits."

Generally speaking, a Bronze Plan is intended to have the lowest premium of the 4 new categories of plans but charge the highest out-of-pocket costs for healthcare services.

What are a bronze plan's out-of-pocket costs?

Bronze Plans are designed so that insurance companies will typically pay 60% of covered healthcare expenses with the remaining 40% to be paid by consumers. The consumer’s expenses will be in the form of out-of-pocket fees over and above the cost of the plan’s monthly premium. Out-of-pocket expenses in 2015 are capped at $6,600 for individual plans and $13,200 for family plans.

The 40/60 percentages are based on projected use of healthcare services by plan members. The actual out-of-pocket expenses of any single beneficiary may work out to be more or less than this ratio but should remain within the range. Those people whose out-of-pocket limits reach the annual maximum could see their share of healthcare costs fall until a new calendar year begins and the annual limit reset.

Out-of-pocket expenses include fees like deductibles, copayments, or coinsurance. Different plans will approach the 40/60 split in various ways (see the table below) so it is important to research the financial details of a specific plan before deciding which one to purchase. For example, a person who has frequent medical expenses may want a Bronze Plan with a lower deductible (depending on premium) while a healthy person may want the opposite.

Below are the average out-of-pocket cost-sharing expenses for medical services and prescription drugs found across bronze plans.

Cost-Sharing CategoryAverage for a Bronze Plan
Deductible for an individual enrollee$5,181
Deductible for a family$10,545
Doctor Visit34% of doctor visit expense charged as coinsurance fee. Coinsurance was the most common form of cost-sharing for doctor visits among 2015 Bronze Plans
Generic drugs32% of generic drug expense charged to patient as coinsurance fee (2014 data)
Preferred brand drugs35% of preferred brand drug expense charged to patient as coinsurance fee (2014 data)
Non-preferred brand drugs36% of non-preferred brand drug expense charged to patient as coinsurance fee (2014 data)
Specialty drugs34% of specialty drug expense charged to patient as coinsurance fee (2014 data)
Specialist visit34% of specialist visit expense charged as coinsurance fee. Coinsurance was the most common form of cost-sharing for specialist visits among 2015 Bronze Plans
Annual cap on out-of-pocket costs for an individual$6,373
Annual cap on out-of-pocket costs for a family$12,749

* Doctor visit charges vary based on length and whether you are an existing patient or new patient. For reference, a cost estimate for a doctor visit in the Boston area by an established patient is $138.1

Below is an illustration of how costs could differ among Bronze plans for an individual enrollee.

 Bronze Plan Example #1Bronze Plan Example #2Bronze Plan Example #3
StateCaliforniaNew YorkOhio
PlanAnthem Blue Cross of California - Bronze Plan (PPO)United Healthcare - New York Standard Bronze (EPO)Aetna - ADVANTAGEPLUS 5500 PD
Deductible$5,000$3,000$5,500
Doctor Visit Fee$6050% of cost10% of cost
Coinsurance Fee30% of cost50% of cost10% of cost
Annual Limit on Out-of-Pocket Expenses$6,350$6,350$6,350

For some plans, the consumer’s share of expenses may come in the form of large deductibles (e.g. above $5,000) with low out-of-pocket costs for services received after the deductible is satisfied. For other plans, the deductible might be low but the consumer would be responsible for 40% of the cost of every covered medical service he or she receives.

The examples above show significant differences between deductibles and coinsurance even though the plans offer the same essential benefits and cap the maximum out-of-pocket expenses at $6,600 for individuals in 2015.It’s also important to remember that coverage depends on you using the plan’s approved healthcare providers. Using a doctor or hospital outside of that network could result in significantly higher costs.

It is estimated that the Bronze Plan requires higher cost-sharing for consumers than the typical employer-based plan. Moreover, people who are insuring family members along with themselves will have higher out-of-pocket limits as well as higher premiums. However, with respect to families, the income limits for government subsidies are also higher.

Bronze plan premiums

Bronze plans have the lowest premium rates of the four new types of metal plans since they charge the highest out-of-pocket costs. However, there may be instances where the Silver Plan for one insurance company may charge a lower premium than the Bronze Plan of another insurance company. Comparison shopping will be essential for anyone who wants to minimize their healthcare expenses. HealthPocket’s health insurance comparison tool allows people to compare all the plans available in their area.

Below are the average monthly premiums found for 30, 40, 50, and 60-year-old individuals in Bronze plans across 34 different states.

Age 30Age 40Age 50Age 60
$263$296$413$627

Bronze Plan Enrollment Numbers

According to a report released in May 2014 by the Department of Health and Human Services (HHS) for marketplace enrollment between October 1, 2013 and April 19, 2014 (includes additional special enrollment period activity past the initial March 31st enrollment deadline), 20% of individuals who selected a marketplace plan on either the Federally-facilitated marketplace (FFM) or a State-based marketplace (SBM) chose a bronze plan. Additionally, one-third of individuals who selected a plan on the FFM without financial assistance chose a Bronze plan. With respect to gender, 19% of males chose a bronze plan versus 16% of females. However, due to more females than males selecting a marketplace plan overall, the total number of women who selected a bronze plan (481,577) was slightly greater than the total number of men (457,410) who selected a bronze plan. The following table displays the age distribution of individuals who selected a bronze marketplace plan. For each age group the percent of bronze total represents the proportion of individuals who selected a bronze plan that were in the age group. Percent of age group total represents the proportion of individuals in the age group who selected a bronze plan.

Age GroupNumber of Individuals that Selected a Bronze Plan on FFM% of Bronze Total% of Age Group Total
Age Under 18729788.00%21.00%
Age 18-259100710.00%15.00%
Age 26-3416340917.00%18.00%
Age 35-4415358616.00%16.00%
Age 45-5420819122.00%17.00%
Age 55-6424655826.00%18.00%
Age 65 or Over34640%*17.00%

*0% due to few seniors choosing a bronze plan and rounding

Bronze Plans On-Exchange vs. Off-Exchange

Bronze plans can be purchased either on-exchange (via either the Federally-facilitated marketplace or a state-based marketplace) or off-exchange (via a private insurance company). Regardless of whether the bronze plan is sold on-exchange or off-exchange it must meet the minimum essential health benefit standards of the ACA. Typically the benefits and cost-sharing of the same plan sold by the same insurer on-exchange are the same off-exchange. Premiums are also generally similar, if the not the same.

In June 2014 HealthPocket conducted a study which compared premiums of metal plans sold on-exchange with premiums of metal plans sold off-exchange in the most populous city of each state. Results of the study indicated that on average the bronze plans with the lowest annual premiums offered by four major off-exchange insurers were 45% more costly than the bronze plans with the lowest annual premiums offered on-exchange. The average monthly on-exchange bronze plan premium for a 40-year old non-smoker was $205 and the average deductible for the lowest premium bronze plans was $5,613. Out of all 39 cities included in the study, residents of Minneapolis, Minnesota were offered a bronze plan with the lowest monthly on-exchange premium ($115 with a deductible of $6,300) while residents of Cheyenne, Wyoming were offered a bronze plan with the highest monthly on-exchange premium ($331 with a deductible of $4,000). The health insurance exchanges offered a bronze plan with the lowest annual premium in the vast majority of cities (92%).

Bronze Plans for Small Business Employees

One of the most common questions for employers and employees alike is "Are the Small Business Bronze Plans the same as the Bronze Plans sold to individuals and families?" With respect to health benefits, the small business version of the Bronze Plan will have the same mandatory benefit requirements as Bronze Plans in the individual and family market. They will also cover the same overall percentage of medical costs for a typical population of enrollees.

The Affordable Care Act capped deductibles on small business health plans at $2,000 for individual enrollees and $4,000 for families. However, in February 2013 the Department of Health and Human Services permitted small group health insurance plans to exceed the deductible caps if it was necessary to maintain the appropriate percentage of out-of-pocket costs for enrollees. HealthPocket found the following average out-of-pocket costs for bronze plans in the small business market.

Cost-sharing categoryAverage for a Bronze Plan
Medical deductible for individual enrollee$4,216
Medical deductible for family$8,667
Primary care visit33%
Specialist visit33%
Annual cap on out-of-pocket costs for an individual$6,224
Annual cap on out-of-pocket costs for a family$12,518

The average deductibles for Bronze plans exceeded both the $2,000 individual and $4,000 family deductible caps. In fact, nearly all Bronze plans exceeded the deductible caps for both individuals and families.

Small business Bronze Plans are known as "group plans" since a single plan covers a collection of employees. Typically a group plan can obtain lower rates compared to an individual purchasing identical coverage. The larger the firm is, the greater its purchasing power. The Affordable Care Act requires companies employing 50 or more workers to provide health insurance to their employees or face a monetary penalty. Additionally, employee premiums cannot exceed 9.5% of household income or the employer can face penalties. For more information on small business health insurance and the Affordable Care Act, see our Small Business Health Insurance page.

Bronze Plan Frequently Asked Questions (FAQ)

How are Bronze Plans different than other Obamacare health plans?

The fundamental difference among the new Obamacare health plans is the percentage of covered medical costs paid by the health plan. The Bronze Plan pays 60% of typical medical costs while the other Obamacare health plans pay a higher percentage of these costs.

How much does a Bronze Plan cost?

The monthly premium for a Bronze Plan depends on the insurer from whom you purchase the plan, the number of people to be insured by the plan, your age, whether you smoke, and the region in which you live. You can use HealthPocket’s comparison tool to compare Bronze Plan premiums in your area.

When Can I Enroll in a Bronze Plan?

The first Open Enrollment period for the new Affordable Care Act health plans began October 1, 2013. This year's open enrollment period runs from November 15, 2014 to February 15, 2015. See our Open Enrollment article for more information.

How much will a doctor visit cost for a Bronze Plan?

It depends on the Bronze Plan in which you enroll as well as your state of residence. For example, in California Bronze Plans have a standardized charge of $60 (or 40% of total cost for HSA Bronze plans) for a primary care visit. In other states, the doctor visit charge is not standardized. HealthPocket’s research on preliminary Bronze Plan rate filings found that the doctor visit copayment charge averaged $41 across the states that were analyzed.

One of the issues to consider is that a deductible may apply to a doctor visit, which means you would pay the full cost until you satisfy the deductible amount on the plan. In California, the first three non-preventive care visits are exempted from a deductible but subsequent doctor visits are not exempted. The full cost of a doctor visit can be well over $100 depending on a person’s region.

How much will I have to pay for prescription drugs on a Bronze Plan?

All qualified health plans will be required to include prescription drug coverage starting in 2014. However, that does not mean that your specific medications will be covered. The Affordable Care Act requires that at least one drug is covered in each therapeutic category and class. However, an individual state’s choice of a benchmark plan will provide the exact number of drugs that are required within each category and class. Depending on the health plan, this can mean that the cholesterol lowering drug Zocor may be covered but Lipitor is not covered. Before enrolling in a Bronze plan (or any health plan), it is important to determine:

  • Are your medications covered?
  • What are the copayment or coinsurance fees for your medications?
  • Does the provider network include your preferred physician(s)?
  • Are there any restrictions placed on your medications (e.g. the need for prior authorization)?

Another consideration regarding drug costs is a deductible amount may need to be satisfied before the plan begins to share the cost of drugs.

What Is the Deductible Amount for a Bronze Plan?

A deductible is the amount a consumer pays for covered medical services. HealthPocket found individual Bronze plan medical deductibles were $5,181 on average.

If I find the out-of-pocket costs for a bronze plan are too high for my budget, can I switch to another metal plan with lower cost-sharing?

Yes, but you will have to wait for your next enrollment period unless you qualify for a special enrollment period (e.g. you moved to a new area where your existing plan does not have a healthcare provider network).


Sources:

1 Cost estimate assumes a 10 minute visit by an established patient to a doctor within zip code 02144. Estimate provided by FAIR Health (FairHealthConsumer.org) for CPT code 99212. Estimate obtained from web site on June 12, 2013

 

 

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