Gold Plan – Affordable Care Act (Obamacare)

11-25-2014

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Gold Plan – Affordable Care Act (Obamacare)

Understanding the Gold Plan

Among the four new categories of health insurance plans created by the Affordable Care Act (ACA) is the Gold Plan. The Gold Plan offers the second lowest out-of-pocket costs of the new plan types. Only the Platinum Plan offers lower out-of-pocket costs for a standard enrollee population. The Gold Plan provides the same essential benefits as the other plan types. Essential benefits are the minimum services to be covered by an Affordable Care Act health insurance plan. However, individual plans do have the option of enhancing their benefits beyond the basic benefits required by the ACA.

Gold Plans are required to cover 80% of the covered medical costs for a typical enrollee, with the remaining 20% paid by the enrollee. The 80% figure is based on the government’s expectation of healthcare usage. Depending on what services you use, this coverage may not exactly match 80% of medical costs. The 20% of healthcare costs paid by the enrollee would be in the form of out-of-pocket deductibles, copayments, and coinsurance fees. The monthly premium for the Gold Plan, however, is paid in addition to the out-of-pocket costs.

The Gold Plan is one of the two plan types along with the silver plan that an insurance company must offer in order to participate in a health insurance exchange. A health insurance exchange is a state marketplace for health insurance plans meeting the ACA requirements.

Out-of-Pocket Costs for Gold Plan Enrollees

In Gold Plans, the insurance company pays 80% of covered healthcare expenses based on an average person’s expected use of healthcare services. The remaining 20% of expenses are paid out of pocket by the policyholder. Below are the average out-of-pocket cost-sharing expenses for medical services and prescription drugs found across gold plans.

Cost-Sharing CategoryAverage for a Gold Plan
Deductible for an individual enrollee$1,198
Deductible for a family$2,626
Doctor Visit$23
Specialist visit$45
Generic drugs$11 (2014 data)
Preferred brand drugs$39 (2014 data)
Non-preferred brand drugs$85 (2014 data)
Specialty drugs28% of specialty drug expense charged to patient as coinsurance fee (coinsurance fees used for specialty drugs in 52% of 2014 plans studied)
Annual cap on out-of-pocket costs for an individual$4,298
Annual cap on out-of-pocket costs for a family$8,986

The specifics of deductibles, copayments, and other out-of-pocket costs will vary by Gold Plan, but we do know that for a standard population the Gold Plan should be expected to cover 80% of healthcare expenses. To illustrate how costs could differ among Gold Plans, we’ve created a table of two hypothetical Gold Plans.

 Gold Plan Example AGold Plan Example B
Consumer Out-of-Pocket Costs20% of costs20% of costs
Deductible$250$2,000
Coinsurance20%10%

Gold Plan Premiums

Gold plans have the second highest premium rates of the four new types of metal plans since they charge the second lowest out-of-pocket costs. However, there may be instances where the Gold Plan for one insurance company may charge a lower premium than the Bronze or Silver Plan of another insurance company, as well as instances where the Platinum Plan for one insurance company may charge a lower premium than the Gold Plan of another insurance company. Comparing plans is essential for anyone trying 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 Gold plans across 34 different states.

Age 30Age 40Age 50Age 60
$336$378$528$801

Gold Plan Enrollment Numbers

In May 2004 the Department of Health and Human Services (HHS) released a report on marketplace enrollment covering the start of open enrollment for Obamacare, October 1, 2013 to April 19, 2014. Although March 31, 2014 was the original enrollment deadline, some individuals qualified for a special enrollment period and selected plans after March 31st. Approximately 9% of individuals who selected a marketplace plan either on the Federally-facilitated marketplace (FFM) or a state-based marketplace (SBM) chose a gold plan. By gender, 8% of women and 9% of men selected a gold plan on the FFM. However, due to more females than males selecting a marketplace plan overall, the total number of women who selected a gold plan (248,478) was slightly greater than the total number of men (216,212) who selected a gold plan. The table below provides information on the age distribution of individuals who selected a gold marketplace plan. For each age group the percent of gold total represents the proportion of individuals who selected a gold plan that were in the age group. The percent of age group total represents the proportion of individuals in the age group who selected a gold plan.

Age GroupNumber of Individuals that Selected a Gold Plan on FFM% of Gold Total% of Age Group Total
Age Under 185827513.00%16.00%
Age 18-25377678.00%6.00%
Age 26-347299916.00%8.00%
Age 35-447652616.00%8.00%
Age 45-549478320.00%8.00%
Age 55-6412337727.00%9.00%
Age 65 or Over11040%*5.00%

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

Gold Plans On-Exchange vs. Off-Exchange

All metal plans including gold plans can be obtained through the Federally-facilitated marketplace or a state-based marketplace (also referred to as on-exchange) or through a private insurance company (also referred to as off-exchange). The exchange status of a plan does not impact whether or not it covers the ACA’s minimum essential health benefit requirements and all metal plans sold on- or off-exchange must meet these standards. Generally the benefits and cost-sharing of the same plan sold by the same insurer off-exchange are the same. Premiums are also typically similar, if not the same.

HealthPocket conducted a study in June 2014 which compared metal plans sold on-exchange with metal plans sold by four major off-exchange insurers. The study examined the lowest available premiums for gold plans in the most populous cities in 39 states, and the results indicated that in 35 out of 39 cities (90%) the gold plan with the lowest premium was found on-exchange. The average monthly on-exchange gold plan premium for a 40-year old non-smoker was $297 and the average deductible for the lowest premium gold plan was $1,431. Out of all cities included in the study, residents of Minneapolis, Minnesota were offered a gold plan with the lowest monthly on-exchange premium ($180 with a deductible of $2,000) while residents of Anchorage, Alaska were offered a gold plan with the highest monthly on-exchange premium ($491 with a deductible of $750).

Average Out-of-Pocket Costs for Gold Plans on the Small Business Market

The Affordable Care Act required deductible caps on small business health plans. For individual enrollees the maximum deductible was $2,000 while for families the maximum deductible was $4,000. However the Department of Health and Human Services later indicated that small group health insurance plans used by businesses and other organizations were allowed to exceed the deductible caps, but only if necessary to maintain the correct percentage of enrollee out-of-pocket costs.

HealthPocket found the following average out-of-pocket costs for gold plans in the small business market.

Cost-sharing categoryAverage for a Gold Plan
Medical deductible for individual enrollee$1278
Medical deductible for family$2872
Primary care visit$23
Specialist visit$43
Annual cap on out-of-pocket costs for an individual$3,758
Annual cap on out-of-pocket costs for a family$7,926

Monitoring Enrollees

One of the issues that the government intends to monitor is whether Gold and Platinum plans attract more sickly enrollees and drive up premiums. The ACA provides some tools to address this issue (e.g. reinsurance, risk adjustment, and risk pooling) but it is impossible to tell whether these tools will be sufficient if these plans do attract a disproportionate representation of high-cost enrollees.

Gold Plan Frequently Asked Questions

How are Gold 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 Gold Plan typically pays 80% of covered medical costs.

How much does a Gold Plan cost?

The monthly premium for a Gold 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 your geographic region. You can use HealthPocket’s comparison tool to compare Gold Plan premiums in your area.

When Can I Enroll in a Gold Plan?

The Open Enrollment period for Affordable Care Act health plans runs from November 15, 2014 to February 15, 2015. See our Open Enrollment article for more information.

What Is the Deductible Amount for a Gold Plan?

A deductible is the amount a consumer pays for covered medical services. HealthPocket found individual Gold plan medical deductibles were $1,198 on average.

Are insurers selling metal plans off exchange required to offer a Gold Plan?

No. If an insurer is selling on-exchange, then the insurer must offer at least a Silver Plan and a Gold Plan. The same rules do not apply to health plans sold off-exchange.


 

 

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