Bronze Plan – Affordable Care Act (Obamacare)
- What is a bronze plan?
- What are a bronze plan's out-of-pocket costs?
- Bronze plan premiums
- Bronze Plan Enrollment Numbers
- Bronze Plans On-Exchange vs. Off-Exchange
- Bronze plan frequently asked questions
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 health plans under the Affordable Care Act 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. However, as illustrated below, this does not mean that the insurer pays 60 cents of every dollar of healthcare expense for an enrollee. The consumer’s expenses are in the form of out-of-pocket fees over and above the cost of the plan’s monthly premium. Out-of-pocket expenses in 2016 are capped at $6,850 for individual plans and $13,700 for family plans, though plans can apply lower limits if they so choose.
The 60/40 payments by insurer versus enrollee 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. Those people whose out-of-pocket limits reach the annual maximum could see their share of covered healthcare costs discontinue until a new calendar year begins and the annual limit is reset.
Out-of-pocket expenses include fees like deductibles, copayments, or coinsurance. Different plans will approach the 60/40 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.
|Cost-Sharing Category||Average for a Bronze Plan|
|Deductible for an individual enrollee||$5,731|
|Deductible for a family||$11,601|
|Doctor Visit||32% of doctor visit expense charged as coinsurance fee. Coinsurance was the most common form of cost-sharing for doctor visits among 2016 Bronze Plans|
|Generic drugs||32% of generic drug expense charged to patient as coinsurance fee (2014 data)|
|Preferred brand drugs||35% of preferred brand drug expense charged to patient as coinsurance fee (2014 data)|
|Non-preferred brand drugs||36% of non-preferred brand drug expense charged to patient as coinsurance fee (2014 data)|
|Specialty drugs||34% of specialty drug expense charged to patient as coinsurance fee (2014 data)|
|Specialist visit||31% of specialist visit expense charged as coinsurance fee. Coinsurance was the most common form of cost-sharing for specialist visits among 2016 Bronze Plans|
|Annual cap on out-of-pocket costs for an individual||$6,639|
|Annual cap on out-of-pocket costs for a family||$13,292|
* 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 2015 Bronze plans for an individual enrollee.
|Bronze Plan Example #1||Bronze Plan Example #2||Bronze Plan Example #3|
|Plan||Anthem Bronze Pathway EPO 6250 20||Humana - Humana Bronze 4850/South Florida HUMx (HMOx)||Assurant Health Bronze Plan 003|
|Doctor Visit Fee||$40||$50 Copay before deductible / 20% of expense as coinsurance fee after deductible is satisfied||50% of expense as coinsurance fee after deductible is satisfied|
|Coinsurance Fee||20% of cost||20% of cost||50% of cost|
|Annual Limit on Out-of-Pocket Expenses||$6,600||$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 a significant percentage 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. For the 2016 plan year, the limit on annual out-of-pocket costs rises to $6,850 for an individual and $13,700 for a family. 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 average premiums of the four types of Affordable Care Act plans since they charge the highest out-of-pocket costs as compared to the other plans. 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 is 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 2016 average monthly premiums found for 30, 40, 50, and 60-year-old applicants in Bronze plans available in states using the Healthcare.gov marketplace.
|Age 30||Age 40||Age 50||Age 60|
Bronze Plan Enrollment Numbers
Another government study indicated that in states using the federal marketplace, Healthcare.gov, 20% of female enrollees and 23% of male enrollees selected a bronze plan as their health insurance choice.
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 Group||Number of Individuals that Selected a Bronze Plan on FFM||% of Bronze Total||% of Age Group Total|
|Age Under 18||168,300||9.00%||23.00%|
|Age 65 or Over||9,540||1%||18.00%|
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. However, it should be noted that an insurer may choose to offer different plans off-exchange than the plans the same insurer offers on-exchange.
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 originally 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 2014 small business market.
|Cost-sharing category||Average for a Bronze Plan|
|Medical deductible for individual enrollee||$4,216|
|Medical deductible for family||$8,667|
|Primary care visit||33%|
|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 the covered medical costs among its enrollees 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. Another important factor to remember is Advanced Premium Tax Credits which can subsidize bronze plan premiums if an individual meets eligibility criteria.
When Can I Enroll in a Bronze Plan?
The annual enrollment period for the 2016 plan year will begin on November 1, 2015 and continue through January 31, 2016.
In 2015 there had been a Special Enrollment Period for many facing the uninsured penalty on their 2014 tax return. There is no guarantee that a similar Special Enrollment Period will be granted in 2016. 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.
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 Affordable Care Act health plans are required to include prescription drug coverage among their benefits. However, that does not mean that your specific medications will be covered by every plan. 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 $5,731 on average for the 2016 plan year.
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).
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.