Obamacare Metal Plans
What is Obamacare?
“Obamacare” is a popular name for the Patient Protection and Affordable Care Act since this health reform law was championed by President Barack Obama. While the legislation contained numerous changes to the American health insurance market, its principal aspirations were the reduction of the uninsured population and the lowering of health insurance premiums. The law also contained an uninsured tax penalty on Americans who fail to obtain creditable insurance as well as requirements regarding the types of medical benefits that must be included in health insurance purchased by individuals and small groups. The law also contained a prohibition on insurance application rejections based on health status or pre-existing conditions and premium subsidies for those whose income qualified and whose premiums exceeded a set percentage of income.
Obamacare created new designs for health plans. These new health plans are often 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 marketplace, 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 metal plans offered by 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 maximum out-of-pocket amount that an enrolled individual can pay in a calendar year before their plan covers the rest of their out-of-pocket expenses. In 2014 the maximum out-of-pocket limit for Obamacare plans is $6,350 for an individual, or $12,700 for a family.
All metal plans must offer essential health benefits. These are the basic insurance benefit requirements the Affordable Care Act stipulates all qualified health plans must provide to 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 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:
- Ambulatory patient services (such as doctor visits and other care you receive as a “walk-in” as opposed to services a person receives as an “inpatient” at a hospital or other care facility)
- Emergency services - These include care received in an Emergency Room
- Hospitalization - These include medically-necessary surgeries and other inpatient procedures
- Maternity care and newborn care
- Mental health services & substance use disorder services – These services include counseling as well as behavioral health treatment for alcohol abuse and drug abuse
- Drug coverage – This applies to prescription medication and not over-the-counter drugs
- Rehabilitative and habilitative services and devices - Rehabilitation covers services such as relearning to speak after an aneurysm while habilitative services involve learning a new skill such as managing diabetes through various behaviors
- Laboratory tests and services (for example, X-Rays)
- Preventive and wellness services as well as the management of chronic diseases
- Pediatric medical services (including both oral care and vision care)
Individual insurance companies are not required to offer plans from all four metal tiers. If the insurer chooses to participate in the Federally-facilitated marketplace (FFM) or one or more state marketplaces, they must offer at least one Silver plan and at least one Gold plan. There is also a catastrophic plan for individuals who can demonstrate problems affording a Bronze Plan. Tax subsidies cannot be used to reduce premiums for catastrophic plans. Catastrophic plans are also generally only available to individuals under the age of 30.
2014 Obamacare Metal Plan Enrollment
In May the Department of Health & Human Services (HHS) released data on marketplace (both Federally-facilitated and state exchanges) enrollment statistics from the beginning of open enrollment, October 1, 2013, to April 19, 2014 (includes additional special enrollment period activity beyond the initial March 31, 2014 deadline). About 5.4 million individuals selected a plan through the Federally-facilitated marketplace (FFM) and approximately 2.6 million individuals selected a plan through a State-based marketplace (SBM). Of the over 8 million individuals who selected a marketplace plan through either a SBM or the FFM:
- 20% of individuals chose a Bronze plan
- 65% of individuals chose a Silver plan
- 9% of individuals chose a Gold plan
- 5% of individuals chose a Platinum plan
- 2% of individuals chose a Catastrophic plan
More individuals on the FFM chose a silver plan (69%) than on the SBMs (58%). The report also provided breakdowns of metal plan selection based on age and gender for the FFM. Females were more likely to choose a Silver plan than males, 71% of women selected a Silver plan while 67% of men selected a Silver plan. Males on the other hand were more likely to select a Bronze plan (19%) than females (16%). Overall more women than men selected a marketplace plan (54% vs 46%). Additionally, the majority (68%) of young adults between the ages of 18 and 34 chose a Silver plan on the FFM. 17%, 7%, 4%, and 5% of young adults selected a Bronze, Gold, Platinum, and Catastrophic plan, respectively.
The availability of health insurance subsidies in the form of tax credits influenced the metal level of the plan individuals enrolled in. Overall 85% of individuals who selected a marketplace plan qualified for an advance premium tax credit (APTC) with or without a cost-sharing reduction (CSR). The following statistics apply only to the FFM:
- 76% of individuals who selected a marketplace plan with financial assistance chose a Silver plan
- 95% of individuals who chose a Silver plan were eligible for a subsidy to help pay their premiums
- A quarter of individuals who selected a marketplace plan without financial assistance chose a Silver plan
- One-third of individuals who selected a marketplace plan without financial assistance chose a Bronze plan
Frequently Asked Questions
How much do metal plans cost?
The monthly premium for any of the four metal plans are based on several factors:
- Your age
- Your smoking status (some regions do not allow smoking status to be considered)
- Where you live
- The number of people enrolling with you (e.g. a spouse or child)
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 compare plan premiums and benefits prior to enrolling. Premiums for metal plans can be compared on our health insurance premium quote page.
Do I have to buy a metal plan?
The Affordable Care Act imposed a health insurance mandate to take effect in 2014. You do not necessarily have to purchase a metal plan but you may face a penalty in 2014 if you do not meet the requirement for creditable health insurance. Health insurance coverage can come from a number of sources such as, but not limited to: an employer, purchased privately, a public health plan such as Medicare, Medicaid, or CHIP (Children’s Health Insurance Program), TRICARE for service members, retirees, and their families, the veteran’s health program, or a grandfathered health plan. A short-term health plan would not qualify as creditable health coverage but a catastrophic plan does meet the requirement, despite the fact that it is not considered a metal plan.
The uninsured penalty is pro-rated based on the number of months an individual or family goes without creditable health insurance coverage, which means you must only pay the entire amount if you go without coverage for the entire year. In 2014 the penalty is $95 per adult, $47.50 per child, up to $285 for a family or 1.0% of the family’s annual income, whichever is greater. The penalty cannot be greater than the national average premium for a Bronze plan offered on a health insurance exchange. The IRS has recently stated that the maximum uninsured penalty an individual must pay in 2014 is $2,448, $12,240 for families with five or more members.
In 2015 the penalty increases to $325 per adult, $162.50 per child, up to $975 for a family or 2.0% of the family’s annual income, whichever is greater. In 2016 the penalty will increase to $695 per adult, $347.50 per child, up to $2,085 for a family or 2.5% of the family’s annual income, whichever is greater. Penalty amounts after 2016 will be adjusted based off of the cost of living for that year.
Where do I buy a metal plan?
An insurance company, a health insurance exchange (Federally-facilitated marketplace or state marketplace), or an insurance broker can sell a metal plan. HealthPocket’s health insurance premium comparison tool includes links to various organizations that sell insurance to consumers who have made a choice of which insurance plan they want to purchase. For those who are unsure about which plan to enroll in, agents of these organizations are trained to help answer questions about health insurance.
Can a metal plan’s list of covered medications (i.e. a formulary) change outside the annual enrollment period?
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 but may be required to do so for states where the federal health insurance exchange is not used.
Why were ACA plan tiers named after metals?
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 plans in Massachusetts had the names Bronze, Silver, and Gold. Originally the marketing officer in charge of naming the plans was considering designations with historical significance for Massachusetts such as "The Minute Man Plan" and the "Patriot Plan." However, after hearing his 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.
ASPE Issue Brief: Health Insurance Marketplace: Summary Enrollment Report for the Initial Annual Open Enrollment Period (May 1, 2014) http://aspe.hhs.gov/health/reports/2014/marketplaceenrollment/apr2014/ib_2014apr_enrollment.pdf
The fee you pay if you don't have health coverage https://www.healthcare.gov/what-if-i-dont-have-health-coverage/
IRS: Wealthy facing max fine of nearly $2,500 for not having insurance (July 24, 2014) http://thehill.com/policy/healthcare/213308-uninsured-could-be-fined-almost-2500