The Affordable Care Act, otherwise known as Obamacare, requires insurance companies in 2014 to offer new categories of health insurance plans to consumers: 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, the 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. For people without group insurance from an employer or other group, the Bronze plan is the minimum health insurance plan in which they can enroll that will satisfy the Affordable Care Act’s mandate for people to purchase health insurance.
Bronze Plans are designed so that insurance companies will 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 for individuals is expected to be capped at $6,350 annually starting in 2014.
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 is the average out-of-pocket cost-sharing found across bronze plans sold on exchange across 34 different states.
|Cost-Sharing Category||Average for a Bronze Plan|
|Deductible for an individual enrollee||$5,081|
|Deductible for a family||$10,386|
|Doctor Visit||30% of doctor visit expense charged to patient as coinsurance fee* (coinsurance fees used for doctor visit in 54% of plans studied)|
|Specialist visit||30% of specialist visit expense charged to patient as coinsurance fee|
|Annual cap on out-of-pocket costs for an individual||$6,267|
|Annual cap on out-of-pocket costs for a family||$12,569|
* 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 #1||Bronze Plan Example #2||Bronze Plan Example #3|
|Plan||Anthem Blue Cross of California - Bronze Plan (PPO)||United Healthcare - New York Standard Bronze (EPO)||Aetna - ADVANTAGEPLUS 5500 PD|
|Doctor Visit Fee||$60||50% of cost||10% of cost|
|Coinsurance Fee||30% of cost||50% of cost||10% 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 $6,350 in 2014. 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 are expected to have the lowest premium rates for the four new types of 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.
Premiums for Bronze Plans are only guesses until insurance companies unveil their qualified health plans for open enrollment. Some sources have estimated a Bronze Plan premium in 2016 to be $4,500 to $5,800 annually for individuals and $12,000 to $20,000 for familes of four or five.
Open enrollment for Bronze Plans and other qualified health plans on October 1, 2013 with coverage beginning January 1, 2014.
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?" Within 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. The will also cover the same overall percentage of medical costs for a typical population of enrollees. The small business versions of the Bronze Plan will have maximum deductible amounts. For a single employee insured by a Bronze Plan, the maximum deductible in 2014 is $2,000. Since this is a maximum amount, the actual deductible amount could be lower. For a family insured through a Bronze Plan provided by a small business employer, the maximum deductible is $4,000 in 2014.
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 as 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 article.
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.
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. Starting October 1, 2013, you can use HealthPocket’s to compare Bronze Plan premiums in your area.
In the first Open Enrollment period for the new Affordable Care Act health plans begins in October 1, 2013. The coverage for plans enrolled in during 2013 will begin January 1, 2014. See our Open Enrollment article for more information.
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 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.
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:
Another consideration regarding drug costs is a deductible amount may need to be satisfied before the plan begins to share the cost of drugs.
A deductible is the amount a consumer pays for covered medical services. The final answer to that question won’t be determined until all the health plans are made public in October 2013 but an examination of early rate filings found Bronze Plan medical deductibles were on $4,509 average.
Yes, but you will have to wait for your next enrollment period. Mid-year plan changes are not typically allowed 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).
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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.