Affordable Care Act Health Insurance plans , tiers and Standards
Bronze, Silver, Gold, and Platinum Health Insurance plans. These are names that will soon become very common to every individual purchasing a health care plan. Insurance is something that is often very difficult and challenging for individuals to understand; additionally due to the complexity of the subject individuals often have a very hard time comparing insurance plans. This article focuses on the Affordable Care Act Health insurance plans tiers and standards.
As part of the Affordable Care Act, starting in January 2014 all health plan providers will be required to meet new federal requirement with regards to the standardization of health insurance plans. The law hopes that standardization of health insurance plans will provide consumers the ability to make better decisions when it comes to comparing difference between health insurance plan options and also help guard against insurance company efforts to cherry pick the healthiest people.
What does standardize health insurance plans means and why will it help consumers?
As part of the Affordable Care Act, all health insurers will be mandated to offer plans to consumers that fit within four tiers of coverage: Bronze, Silver, Gold, and Platinum. Any insurer selling plans within one of the health insurance market places must offer at minimum a silver and gold plan as part of their product offerings.
Each plan being offered must offer the minimum essential health benefits. Hence ensuring the scope of benefits provided by the plans are the same. However, as the plan tiers change so will the cost sharing requirement. The amount an individual consumer or family will pay out of pocket will change from tier to tier. For example, a Bronze Health Insurance plan will have an individual pay more out of pocket expense for the same scope of benefits compared to a Silver health insurance plan.
Note: No health insurance plan will be allowed to charge a deductibles, co-payments, or co-insurance – greater than the limits for high-deductible plans. Additionally health plans for small businesses are barred from charging deductibles greater than $2,000 per year for individual coverage or $4,000 per year for family coverage. Through the Affordable Care Act health plans can not charge a deductible or any cost-sharing for certain. preventive health services.
Each Health plan tier will provide four different level of coverage. The level of coverage will be based on the actuarial value. The actuarial value according to healthcare.gov is
“…the percentage of total average costs for covered benefits that a plan will cover.” For example, if a plan has an actuarial value of 70%, on average, you would be responsible for 30% of the costs of all covered benefits. However, you could be responsible for a higher or lower percentage of the total costs of covered services for the year, depending on your actual health care needs and the terms of your insurance policy. This is very different than your monthly premium you pay for your plan; a monthly premium and individual pay.
While the actuarial value for each health insurance plan that falls within one of the tiers will be the same, the premiums (The monthly fee a person pays a health insurance company to maintain their health insurance coverage) will vary for plans within the same tier level. Variation in price will change from one insurer to another, based on multiple factors such as overall use of services, the prices of health care services negotiated by the insurer, and how the plan controls its services.
Affordable Care Act Health Insurance plans: Bronze In the chart illustrated above a bronze health insurance plan would cover 60 percent of all health care costs for an individual. Enrollees of that plan would be responsible for paying 40 percent of the costs.
Affordable Care Act Health Insurance plans: Silver In the chart illustrated above a silver health insurance plan would cover 70 percent of all health care costs for an individual. Enrollees of that plan would be responsible for paying 30 percent of the costs.
Affordable Care Act Health Insurance plans: Gold In the chart illustrated above a Gold health insurance plan would cover 80 percent of all health care costs for an individual. Enrollees of that plan would be responsible for paying 20 percent of the costs.
Affordable Care Act Health Insurance plans: Platinum: In the chart illustrated above Platinum health insurance plan would cover 90 percent of all health care costs for an individual. Enrollees of that plan would be responsible for paying 10 percent of the costs.
While this chart represent an average view of the tiered plans an individuals with high-cost health conditions could possibly end up paying more than the average person, based on their health conditions.