As part of the Affordable Care Act (ACA), the Health Insurance Marketplace (or “Exchange”) reopened on November 1, 2015, when Open Enrollment for health care coverage began from 2016. The Marketplace is a one-stop online health coverage shopping experience designed to make it easy for individuals and families to compare and shop for insurance. Thirteen states have their own market; the rest are associated with the federal HealthCare.gov exchanged or managed by him.
To quickly access the plan for your state, click here and enter the name of your state. Each of these Marketplaces offers a variety of plans from participating health insurance companies.
In addition to finding health coverage, you can use the Marketplace to find out if you qualify for federal subsidies that save you money, including Cost-Sharing Reductions, which can lower your out-of-pocket costs, and Advanced Premium Tax Credits, which reduce your monthly premiums.
These subsidies are available only on the Marketplace and can make a significant difference in the type of coverage you can afford. During open enrollment, which runs from November 1 to December 15, 2020, you can set up an account and complete the application online in your state’s Marketplace to see the health coverage options available to you and find out. if you qualify for the subsidies. .
On January 28, 2021, President Biden signed an executive order (and an extension in March) to implement a Special Enrollment Period, reopening the federal insurance market (healthcare.gov) from February 15 to August 15, 2021.
No matter where you live, all Marketplace plans fall into four “metallic” tiers: Bronze, Silver, Gold, and Platinum, based on how you and the plan can expect to share your health care costs. Here, we explain the different levels of coverage and define some key terms to help you decide between Bronze, Silver, Gold, and Platinum health insurance plans.
Understanding out-of-pocket costs
When you buy health insurance, the amount you pay for coverage each month is called your premium. You pay for this whether or not you go to the doctor, visit the hospital, or buy prescription drugs. When and if you receive medical care, your costs, beyond the premium, are based on your plan’s deductible, copayment, coinsurance, and out-of-pocket maximum. To make informed decisions when comparing and buying health plans, it is important to understand what these terms mean.
A deductible is the amount you must pay for covered services before your insurance begins to pay. For example, if you have a deductible of $ 2,000, you will pay 100% of your health care expenses until the amount you have paid reaches $ 2,000. After meeting your deductible, some services may be covered at 100%, while others may require you to pay coinsurance (more on this below).
A copayment (sometimes called a “copayment”) is a fixed dollar amount you pay for certain health care services. Generally, you will have different copay amounts for different types of services, such as a $ 25 copay for a doctor’s office visit or a $ 250 copay for an emergency room visit. In most cases, the copayments you make do not count toward your deductible.
Your share of the cost of a health care service is called coinsurance. This is typically calculated as a fixed percentage of the total charge for a service, such as 15% or 30%. Coinsurance takes effect after you’ve met your deductible. For example, suppose you have already met your $ 2,000 deductible and your plan’s coinsurance is 15%. If you have a hospital charge of $ 1,000, your share of the costs would be $ 150 (15% of $ 1,000). If your coinsurance were 30%, your share would be $ 300.
A plan’s out-of-pocket maximum (or out-of-pocket limit) is the most you pay during a policy period (usually one year) before your plan begins to pay 100% of the allowed amount. Money you pay for premiums and health care your plan doesn’t cover (for example, elective surgery) doesn’t count toward your out-of-pocket maximum.
Depending on your plan, your deductible, copayments, and / or coinsurance may apply to your out-of-pocket maximum. Different health plans have different out-of-pocket maximums; however, under health care reform, the 2021 limits are $ 8,550 for individuals and $ 17,100 for families.
An important new benefit for 2016 and beyond is that even if the family plan limit is higher, a large number of insurance plans must start paying when the health expenses of any family member have reached the individual maximum of $ 8,550 starting in 2021. Previously, you could refuse to pay until all of your family spending has reached the much higher family limit.
This policy is called a “built-in out-of-pocket limit.” Beginning with the 2016 plans, large group and self-funded non-vested plans must follow this policy for any individual in a family plan who has an out-of-pocket limit greater than the individual limit ($ 8,550 by 2021). The Society for Human Resource Management offers a more detailed explanation.
Essential health benefits
For an insurance company to participate in the Marketplace, it must offer at least Silver and Gold plans.Regardless of which plan you choose (Bronze, Silver, Gold, or Platinum), the same set of Essential Health Benefits will be covered:
- Addiction treatment
- Outpatient Services
- Birth control and breastfeeding
- Newborn and child care
- Emergency services
- Laboratory services
- Maternity care
- Mental health services
- Physical and occupational therapy
- Prescription drugs
- Preventive and wellness services (such as immunizations and cancer screenings)
Covered benefits are the health care services that your insurer pays for under your plan. You may still have to pay a copayment or coinsurance, but your plan recognizes the service. In comparison, if a service is do not covered, such as elective surgery or chiropractic care, you will be responsible for 100% of the associated costs.
The Essential Health Benefits are the minimum requirements for all plans in the Marketplace; Certain plans will offer additional coverage, but no plan can offer less.
The four tiers of health plans (Bronze, Silver, Gold, and Platinum) differ based on their actuarial value – the average percentage of health care expenses that the plan will pay. The higher the actuarial value (ie Gold and Platinum), the more the plan will pay for your bill and therefore the lower your out-of-pocket costs for deductibles, copays, and coinsurance.
The downside to plans that provide more coverage is that you will pay a higher premium each month.
On average, a Bronze plan will cover 60% of covered medical expenses and your share will be the remaining 40%. The actuarial value of each type of plan is shown here:
Your share of the costs may come in the form of a high deductible with low coinsurance once you’ve met your deductible. Another plan might offer a low deductible with a higher coinsurance. For example, Silver Plan A (which generally pays 70% of your health care expenses) offers a high deductible of $ 2,000 and a low coinsurance of 15%. The Silver B Plan, on the other hand, has a low deductible of $ 250 but a higher coinsurance of 30%.
How much will it cost?
For any plan, your monthly premium will be based on several factors including:
- Your age
- Whether you smoke or not (in some states you will pay a “surcharge” if you are a smoker)
- Where do you live
- How many people are signing up with you (spouse and / or child)
- Your insurance company
Since your state’s market allows multiple private insurers to offer plans, a Silver plan from one company may cost more or less than the same plan offered by a different insurer. However, plans offered by the same company will increase in price as the actuarial value and the amount the plan pays increase.
As mentioned above, the federal limit for annual out-of-pocket expenses for individuals (not including monthly premiums) is $ 8,550; the family limit is $ 17,100. Certain plans may have even lower out-of-pocket limits.
Decide which plan is best for you
Comparing plans and choosing one can be challenging. You will need to consider your health and financial situation. In general, if you expect to have many health care visits or need regular prescriptions, you may be better off with a Gold or Platinum plan that pays a higher percentage of costs. If, on the other hand, you’re generally healthy and don’t expect to have a lot of bills, you may be comfortable choosing a Bronze or Silver plan.
Of course, even healthy people can have accidents or get sick and end up with a lot of medical bills, so you also need to consider your tolerance for risk. It also makes sense to check which hospitals and doctors are included in the plan you choose.
If your income is between 100% and 250% of the federal poverty level ($ 12,880 to $ 32,200 for an individual as of 2021), you may be eligible for a cost-sharing reduction subsidy, which can help reduce your deductibles, copays, and coinsurance.
To receive cost-sharing reductions, you must purchase a Silver plan from the Marketplace. You will still have a variety of plans to choose from, but you must be Silver to take advantage of the cost-sharing reduction subsidy.
Many people will qualify for Advanced Premium Tax Credits, a type of subsidy that lowers your monthly premium.
You may be eligible for this subsidy if your income is between 100% and 400% of the federal poverty level ($ 12,880 to $ 51,040 for one person).
The bottom line
When choosing a plan, it is helpful to remember that all plans (Bronze, Silver, Gold, and Platinum) cover the same Essential Health Benefits.Your monthly health insurance premium will be higher if you choose a higher-tier plan, such as Gold or Platinum. But you will also pay less each time you visit a healthcare provider or get a prescription. In contrast, your monthly premium will be less if you choose a Bronze or Silver plan, but you will pay more for each doctor visit, prescription, or health care service you use.
The Cost Sharing Reduction and Advance Premium Tax Credits subsidies are not automatic – you must apply for them in the Health Insurance Marketplace.
Finding a balance between coverage and costs can be challenging. Starting November 1, you can compare 2022 plans on the Marketplace to find the coverage that best suits your financial situation and health care needs. You can also apply for federal grants that can help you lower your costs.