Whether a health insurance plan is affordable or not for a consumer depends on both the cost of premiums and out-of-pocket costs. A premium is the amount the beneficiary or their employer must pay before they are covered by a health insurance plan. Generally it is paid on a monthly, quarterly, or yearly basis. Out-of-pocket costs are the expenses that the enrollee pays for their medical costs. Deductibles, copayments, coinsurance, and any other fees that the enrollee pays for covered services fall under the category of out-of-pocket costs.
A deductible is the amount the enrollee owes for covered health care services before the plan begins to pay. Deductibles do not necessarily apply to all services. Coinsurance is the percentage that the enrollee owes for a covered health care service. The plan pays for the remaining percentage. Copayment, also known as copay, is similar to coinsurance except instead of a proportion of costs, it is a fixed amount for a covered health care service.
An out-of-pocket maximum or limit is the most an enrollee has to pay during their policy period (generally one year) before their plan begins to pay for 100% of covered health benefits. It is important to remember that annual out-of-pocket maximums do not apply for services obtained outside of one's network. The out-of-pocket limit for a 2016 Marketplace plan is $6,850 for an individual plan and $13,700 for a family plan. And for the 2017 plan year, it is $7,150 for an individual plan and $14,300 for a family plan.
HealthPocket offers a variety of tools that will assist you in finding health insurance that is affordable. Our plan comparison tool allows you to sort plans by monthly cost, deductible, or out-of-pocket maximum.
With the implementation of the Affordable Care Act, it is possible for low-to-moderate income individuals and families to qualify for health insurance premium subsidies for plans purchased on either the Federal exchange or State exchanges. Subsidies come in the form of tax credits and advance credit payments can be used immediately to lower your premiums. These premium subsidies do not apply to out-of-pocket costs such as copayments or coinsurance. Our plan comparison tool allows you to estimate your maximum monthly premium subsidy given your family size and income.
There are also special cost-sharing reduction plans also abbreviated as CSR that are in the Silver metal tier and are open to people with incomes up to 250% of the federal poverty level. People under the age of 30 also qualify for a catastrophic plan which has lower premiums than the metal plans, but does not qualify for subsidies.
The Affordable Care Act included a mandate for employers with fifty or more full-time employee equivalents (a measure of total employees which includes hours from part-time employees) to provide affordable health coverage with actuarial value at least 95% for their full-time employees. In particular the mandate requires the employers to pay a penalty if any of their employees have to pay more than 9.69% of their household income for the employer coverage or if the employer coverage pays less than 60% of covered health care costs for a typical enrollee.
An employee is considered full-time if he or she has sufficient hours of service. In particular, for purposes of the employer shared responsibility provisions, an employee is a full-time employee for a calendar month if he or she averages at least 30 hours of service per week or has 130 hours of service in the month (130 hours of service in a month is treated as the monthly equivalent of at least 30 hours of service per week).
HealthPocket is a free information source designed to help consumers find medical coverage. Whether you are looking for Medicare, Medicaid or an individual health insurance plan, we will help you find the right healthcare option and save on your out of pocket healthcare costs. We receive our data from government, non-profit and private sources, and you should confirm key provisions of your coverage with your selected health plan. If you select a plan presented on our site, you will be directed (via a click or a call) to one of our partners who can help you with your application. Our website is not a health insurance agency and not affiliated with and does not represent or endorse any health plan.