Under the Patient Protection and Affordable Care Act (PPACA, also known as Obamacare), consumers looking for new health insurance will be offered a range of health plan options with different levels of costs and coverage.
Bronze plans will have the least expensive premiums, but will also offer more limited health coverage. Silver and gold plans will cost more in terms of premiums, but will cover more expenses if you need care, while platinum plans will have the most expensive premiums and offer the most comprehensive level of care benefits.
The plans will be more standardized than current health insurance offerings. “Each plan in each level must cover the same set of minimum essential benefits,” say health analysts at the American Cancer Society, who advise consumers with serious illnesses how to choose the best policy.
This standardization should help “individuals and businesses make better informed comparisons among insurance plan options,” according to the non-profit.
However, they do advise consumers that a lower level of premiums will mean less extensive insurance coverage.
For example, with a bronze plan, the health plan or insurer would cover 60% of covered health costs for an average person and the patient would cover 40%. A silver plan would cover 70% of typical costs, a gold plan would cover 80%, and “for a platinum plan, an average individual would pay 10% out of pocket for their covered benefits and the plan would pay 90%.”
Bronze plans, which are expected to have the lowest premiums, may also have higher out-of-pocket costs that consumers will need to pay, so consumers will need to understand what they are getting with each plan and chose carefully.
“Higher level plans (i.e., gold and platinum) will impose lower deductibles, co-payments and co-insurance on people who use health care services, but will likely have higher monthly premiums. Conversely, bronze and silver plans will be cheaper to buy but could expose consumers to significant cost sharing over time,” advise analysts at the American Cancer Society.
Trade publications geared to insurance specialists are sounding the same cautionary note.
“Consumers who think they might be scoring a cheap health plan under PPACA might be in for a rude awakening, as new analysis shows those who chose the cheapest health plans will be hit with higher out-of-pocket costs,” writes Kathryn Mayer in BenefitsPro magazine.
Some additional details:
Open enrollment for the bronze, silver, gold and platinum plans will begin on October 1, 2013 with coverage beginning January 1, 2014.
Insurers are not required to offer plans at all four premium and coverage levels.