The basics of The Affordable Care Act, commonly known as Obamacare, are that it expands coverage – meaning that more things are covered than before and no one can be denied coverage. The four levels are intended to meet various health and financial needs, and are based on the percentage that each plan pays towards health care costs. The plan level also tells the percentage that you will pay for your health care. Your costs include:
- Deductibles – the amount you pay before your insurance carrier starts paying
- Copayments – a fixed amount you pay for a covered service (for example: a $10 copay for a prescription)
- Coinsurance – your share of the cost of covered health care costs
So let’s say you have a $1,000 deductible, a $25 copayment and coininsurance of 20%. For some health care, like going to the doctor, you pay $25. For things like surgery, you first owe and pay your deductible ($1,000), and then will owe 20% of the balance. So if you had surgery that cost $5,000, you would owe $1,000 for your deductible (if you hadn’t already met some of that) and then 20% of the balance, which would be $800 in this example.
So there are four categories of health care, and this is what you’ll pay for each:
Plan What the Play pays What You Pay
Bronze 60% 40%
Silver 70% 30%
Gold 80% 20%
Platinum 90% 10%
It should be no surprise that the Bronze level plans will have the lowest premiums, because they provide the lowest dollar benefit. So you pay less up front, but if you have any major illnesses, injuries, or surgeries, you will pay more out of pocket. If you choose a plan that pays more, you’ll pay more for your premium, but pay less for claims.
All the new plans will also have different pricing structures than you’re used to in the past. Gone are the days of a “family” plan – one premium for the the family. You can still get a family plan and you’ll pay one bill, but you will pay a specific premium for each adult, based on their age, and separate premiums for each child, up to 3 under the age of 21. So for a family of five, you would have five separate premiums combined into one bill for your family plan. If you have more than 3 children under the age of 21, the additional children are covered and there is no additional charge.
Regardless of what plan level you choose, certain essential health benefits must be covered, meaning that things that are considered essential are eligible under the insurance. Things like elective or cosmetic surgery are still not covered by insurance. Things that are covered by insurance include: addiction treatment, ambulatory patient services, care for newborns and children, chronic disease treatment (like diabetes and asthma), emergency services, hospitalization, laboratory services, maternity care, mental health services, occupational and physical therapy, prescription drugs, preventive and wellness services, speech-language therapy. Many plans have additional benefits, so you need to research and use your broker before making any decisions.
Qualifying for subsidies can lower your health insurance costs. There are two ways of receiving this benefit:
- cost-sharing reductions – to receive this you must purchase a Silver plan. This will give you a tax credit on your annual income tax.
- advanced premium tax credits – this is credit sent directly from the government to your insurer to pay a portion of your insurance premium. You can choose what level plan you want, but you have to qualify – use the Kaiser Family Foundation link on the home page to determine if you qualify.
Conditions for subsidies:
- You must live in the U.S.
- You must be a U.S. citizen or possess a valid Green Card
- You cannot currently be incarcerated (in prison)
If you can afford it, you have to have insurance, or pay a fee. There are exceptions, contact us if you want to know more about this.
Dates to remember:
- The next open enrollment period is November 15, 2014 – January 15, 2015
At this point, you cannot get health insurance unless you have a “qualifying” event such as marriage, divorce, a baby, a permanent move, loss of employment based insurance, or any of the events listed on the home page.
Hopefully that made sense, or at least helped with some basic information. The new laws and regulations are complex and confusing. Do not attempt to buy new insurance on your own. Once you sign up for a policy, you won’t be able to change it until the next open enrollment. Please work with us to find a policy that will meet your health and financial needs. You might be interested in a low cost plan, but you need to understand the financial risks you’re taking, especially if you have health problems. Call or email and set up an appointment to evaluate your individual situation.
Remember, if you currently have a grandfathered plan, you can keep it and do not need to get new insurance.
Finally, don’t be confused by some of the things you read. If it sounds too good to be true, then it just might be. Call us with your questions.