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Starting October 1, 2013, consumers could begin shopping for health insurance on the state-based and federally facilitated health insurance exchanges. The plans sold in what has been called the Health Insurance Marketplace are classified into four tiers by actuarial value—the percentage of total expected medical costs paid by the plan. These Obamacare coverage tiers have been unofficially dubbed the metal levels or metal plans.
While the Affordable Care Act requires that all plans include the same minimal coverage for health care items and services in 10 essential health benefits categories, plan costs will vary depending on which metal level is selected. Consumers shop with cost-sharing in mind and determine what share of covered medical expenses they can afford.
Meet the four metal levels
The metal levels and their actuarial value percentages are as follows:
Bronze plan – 60 percent of covered medical expenses paid by the plan; 40 percent by the consumer
Silver plan – 70 percent of covered medical expenses paid by the plan; 30 percent by the consumer
Gold plan – 80 percent of covered medical expenses paid by the plan; 20 percent by the consumer
Platinum plan – 90 percent of covered medical expenses paid by the plan; 10 percent by the consumer
How they work
The higher the share of covered medical expenses paid by the plan, the lower the consumer’s out-of-pocket cost. However, this scenario also translates into a higher premium. If you are relatively healthy and do not anticipate many medical expenses, a bronze or silver plan may be the right solution. If you have health conditions that necessitate frequent care and services, you may find it advantageous to select a gold or platinum plan.
Those who opt for the silver plan and whose incomes fall below 250 percent of the federal poverty level will receive cost-sharing subsidies—these are in addition to any tax credit for which you may be eligible. Cost-sharing will be automatically applied based on income and will help with the cost of deductibles, copayments, coinsurance and total out-of-pocket spending limits.
Plans may be similar, but they are different
Obamacare’s metal plans may share basic benefits and include the same actuarial values, but they will not be identical. All health insurance plans must fit within the tiered structure, but carriers can choose to offer more than the minimal essential health benefits. As such, it is important to compare plans and carefully consider which is best for you and your family.
Also note that health insurance companies are not required to offer all four metal levels. That means certain carriers may choose to offer bronze and silver plans on the exchanges while others might offer only gold and platinum.
Monthly premiums will vary based on factors such age and region. As of Jan. 1, 2014, under the Affordable Care Act, it is illegal for insurers to deny coverage or charge applicants more based on medical history. They must also cover care for preexisting conditions.
Estimate your Obamacare costs and credits
Use the Health eDeals Health Reform Calculator, which was recently mentioned in The Fiscal Times, to estimate your annual insurance premium at each metal level. You may also estimate your tax credit, if eligible, and your opt-out penalty.