Exchange plan breakdown News added by Benefits Pro on October 1, 2013

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Joined: September 07, 2011

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By Kathryn Mayer

The public exchanges are finally here.

With a number of uninsured Americans expected to buy health insurance from the exchanges, it’s important they know what they’ll be buying.

Yet most consumers don’t understand the health plans that open for enrollment Tuesday under the Patient Protection and Affordable Care Act.

When consumers were asked earlier this year by HealthPocket how the new PPACA bronze, silver, gold and platinum health plans differ from one another, 86 percent said they didn’t know. Only 4 percent correctly answered that the percentage of medical costs covered by insurance is the differing factor.

Here’s a brief explanation of the four exchange plans under PPACA.
All plans

All health plans under PPACA — bronze, silver, gold and platinum — have to provide certain essential benefits in order to market themselves on a state exchange as a qualified health plan. These benefits include:

  • Addiction treatment
  • Pediatric care (including vision and dental care) and newborn care
  • Doctor visits and lab tests
  • Emergency care
  • Hospital care
  • Maternity care
  • Mental health services
  • Occupational therapy and physical therapy
  • Certain prescription medicines
  • Preventive care, like cancer screenings and vaccines
  • Speech-language therapy
  • Treatment for long-term diseases, like diabetes and asthma
It’s also important to note that exchanges will not offer voluntary products — dental, life and vision insurance, for example — on the exchanges. That’s been a common misconception about the exchange offerings among consumers.
Bronze plans

At a glance:
  • Lowest premium
  • 60 percent approximate coverage
  • High deductible
The bronze plan under PPACA is the cheapest health plan Americans can buy as far as paying monthly premiums. The plan pays 60 percent of medical expenses.

But those consumers who think they might be scoring a cheap plan may be in for a shock when they get hit with higher out-of-pocket costs.

Analysis of early health insurance rate filings from HealthPocket found PPACA’s bronze plans have higher out-of-pocket costs for consumers compared to plans in the individual and family insurance market right now.

Bronze plans are expected to be the most popular plan among cost-conscious consumers as it’s the least expensive level health plan. But besides the higher out-of-pocket costs, there’s another caveat: Some of these less expensive plans come with very limited lists of doctors and hospitals.
Silver plans

At a glance:
  • 2nd lowest premium
  • 70 percent approximate coverage
  • Separate medical and prescription deductible
  • Consumers may be hearing a lot about silver plans because they’re mentioned with subsidies.
Silver is the only plan that offers the PPACA cost-sharing subsidies to help with out-of-pocket costs, such as deductibles, coinsurance and copayments.

The silver plan has lower out-of-pocket costs than the bronze plan but higher out- of-pocket costs than both the gold and platinum plans.

According to HHS calculations, the average cost of a silver plan is $328 a month. Premiums, though, will vary by state.
Gold plans

At a glance:
  • Higher premium
  • 80 percent approximate coverage
  • Separate medical and prescription deductible
Gold plans are required to cover 80 percent of the medical costs with the remaining 20 percent paid by the plan enrollee.

The gold plan is one of the two plan types an insurance company must offer in order to participate in a health insurance exchange.

Gold plans likely will be most popular among individuals or families with chronic health problems because they cover more of the costs. Gold plans have a lower deductible, and more benefits before hitting the deductible.

Both gold and platinum plans are probably the most comparable to what employers offer employees today.
Platinum plans

At a glance:
  • Highest premium
  • 90 percent approximate coverage
  • No deductible
With a platinum plan, consumers are paying the highest premiums but will have the lowest additional expenses. The plan will cover 90 percent of medical expenses.

The platinum plan might be best for an individual or family that has a chronic health problem.

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