Posted 10/22/2013 By KJ Wojciechowski
Obamacare 101: What Types Of Plans Are Available?
If you choose to purchase health insurance through a state exchange or the federal marketplace, you will have several choices of health plans available to you, depending on the coverage level you require, and how much you wish to spend per month.
Lists the types of health plans available under Obamacare.
Explains how the actuarial value of a covered event relates to each plan level
Points out the similarities between the new plans under Obamacare and traditional managed care plans.
Compare health plans and get instant quotes:
The search for the best coverage at the lowest price starts with comparing as many plans as possible from providers in your area.
Platinum, Gold, Silver, What?
Platinum, Gold, Silver... these may sound like credit card offers, or a frequent flyer program, but they are actually the levels of coverage that are available for purchase through the federal marketplace and/or state exchanges.
At their most basic, the plans are designed to delineate the level of subsidy that the consumer (that's you) will be responsible for in the case of a covered event. You can think of your contribution under the new plans as similar to the copayment and coinsurance that are prevalent in current health plans. (They are not exactly the same, but for the sake of clarity, imagine that they are).
What the Affordable Care Act does, is it sets up a certain percentage value under which your health plan will cover the costs of the essential benefits (more on this later) covered by each plan. This value, known as the actuarial value, is represented by a nice round percentage number for each plan level:
Bronze plans cover 60 percent
Silver plans cover 70 percent
Gold plans cover 80 percent
Platinum plans cover 90 percent
The price of the plans obviously goes up with each level, so a healthy young person might choose to only purchase the least expensive Bronze plan, and still be legally covered under the penalty provisions of the ACA, while an older buyer or those with chronic conditions may opt for the peace of mind of the higher-tiered plans.
How are these tiered plans similar to the health plans available right now through a job, or privately on the open market?
While the plans under the Affordable Care Act may seem radical in their simplicity (they sort of are), they are actually very similar to the form of managed care we've all grown accustomed to over the years.
In fact, roughly 45% of the plans available for purchase under Obamacare through various state exchanges and insurance marketplaces are HMOs, while the remaining plans are also some version of managed care, be it PPO or POS plans, or others.
The reason for this is that the health care industry works around managed care, which remains the most economical way to deliver and pay for health care. The new law simply attempts to improve on the system, by cutting waste and improving the health services provided, while bringing coverage to tens of millions who don't currently have it.
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