Health Insurance is difficult for most people to understand. Since the affordable care act was implemented, that confusion still exists. Let’s see if we can make it easier to understand?
- All plans are designated by metal tiers; bronze, silver, gold and platinum.
- The bronze plans (the least expensive metal) are the lowest cost plans but have the highest out of pocket costs. These plans have a 60/40 split. (Insurance pays 60%, you pay 40%).
- The silver plans cost a little more but have a little lower out of pocket costs. These plans have a 70/30 split.
- The gold plans cost more but have still lower out of pocket costs. These plans have an 80/20 split.
- The platinum plans (being the most expensive metal) have even lower out of pocket costs but have higher premiums. These plans have a 90/10 split.
- All plans must have essential benefits which are outlined in the affordable care act. The most important aspect is there are no pre-existing conditions to be considered for insurance. There is also no cap on the amount the insurance company can pay for claims to one individual. Other significant changes include preventative services at no cost; pediatric dental and vision included in all the plans.
- The federal government is also offering assistance with the premiums if you meet certain guidelines. The standard being used to determine if you qualify for a subsidy is the federal poverty limits. (Click here for the chart) There are other requirements so please ask us what they are?
- There is also cost sharing reductions (CSR) if you are in a certain range above the federal poverty limits you also can get some relief on the copay costs of the plan. (See chart above)
- The actual plan designs are also somewhat confusing. Assume you have a silver plan with a $2000 deductible per person and a $6600 max out of pocket per person. What does that really mean? It means that all charges that do not have a fixed copay (like Doctor Visits, drugs, etc.) are subject to the deductible which you pay entirely on your own. Once that deductible is met, you actually subtract that from the max out of pocket, then subtract any fixed copays you paid during the calendar year and the remaining amount you owe at the appropriate percentage (%) until you spend the maximum. Example: Let’s say you reach the deductible during the calendar year and you now need surgery. You are admitted to the hospital and you then subtract the deductible from the maximum amount and then you subtract any fixed copays you paid during the year, then you split the expenses with the insurance company whereby you pay 30% of the remainder bill and the insurance company pays the 70%. Good news: The insurance company does those calculations so you don’t have to do it.