Well let me first say, “Obama” nor the government has created “plans”. They passed a law that said the insurance company had to create plans that had the following features and they were going to “regulate” them to make sure that the consumer got “affordable” coverage.
So under this Affordable Care Act (ACA), insurance companies will be required to offer plans that fit within four levels of coverage: bronze, silver, gold and platinum. Insurers don’t have to offer plans in all four levels, but within the health insurance Exchanges, all insurers must offer at least one silver and one gold plan.
Each plan level must cover the same set of minimum essential health benefits. The basic benefits will be the same among the plans, however the price for those benefits will vary across the bronze, silver, gold and platinum levels. Bronze plans will have the least comprehensive coverage requiring more out-of-pocket costs for enrollees, and platinum plans will have the richest benefits.
No health plan will be allowed to charge cost-sharing. This includes deductibles, co-payments or co-insurance – greater than the limits for high-deductible plans. In addition, 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. You will not have to meet the deductible or have cost-sharing for certain preventive health services.
How will the levels of coverage differ?
The four levels of coverage – bronze, silver, gold and platinum.
BRONZE PLAN: The insurance would cover 60 percent of all health care costs for an average person. Enrollees, on average, would be responsible for paying 40 percent of the costs.
PLATINUM PLAN: An average individual would pay 10 percent out-of-pocket for their covered benefits and the insurer would pay 90 percent. However, individuals with high-cost health conditions could end up paying significantly more than the average person.
Premiums for different plans at the same level will vary from one insurer to another, based on the overall use of services by enrollees, the prices of health care services negotiated by the insurer, and how the plan controls the services its enrollees use.
In addition to these four levels of coverage, some individuals will be able to purchase catastrophic plans with an even lower actuarial value. Catastrophic plans will cover essential health benefits but have high deductibles. Only young adults under 30 and individuals exempted from the individual mandate because they cannot find affordable insurance are allowed to purchase catastrophic plans.
How do these plan levels work with insurance subsidies for low- and moderate-income people?
Starting in 2014, the ACA provides assistance to low- and moderate-income people up to 400 percent of the federal poverty level (FPL) (about $88,000 per year for a family of four) who need help paying insurance premiums and out-of-pocket expenses. The amount of premium assistance each individual or family receives is related to the coverage tiers. The subsidy is based on the premium for the second lowest-cost silver plan available. A silver plan will cover 70 percent of the average costs, with the enrollee paying, on average, 30 percent. However, if an individual decides to purchase a gold or platinum plan, he or she will need to pay the difference between the premium credit amount and the cost of the more expensive plan. This may be a good choice, since the person will get a more generous level of coverage of, on average, 80 percent of costs.
Individuals and families under 250 percent FPL (about $27,000 for an individual and $55,000 for a family of four) are also eligible for sliding scale cost-sharing credits. This, in addition to premium credits, will help defray any co-payments, co-insurance and deductibles. To get the cost-sharing credits, the individual has to enroll in a silver plan, and would then get assistance with the out-of-pocket expenses (meaning they would pay less than the average 30 percent of health care expenses).