ObamaCare Facts

Health Insurance and the Affordable Care Act

The Affordable Care Act has made significant changes to the private health insurance marketplace, affecting everything from what plans must cover to how much they cost. If you have not yet acquainted yourself with the nuances of the ACA, now is the perfect time to learn more. Read on to learn the facts about ObamaCare.

All health insurance plans offered in the individual and small group market must now meet a number of requirements. These requirements apply to plans both inside and outside the formal ACA Marketplace.

The essential health benefits required by the ACA include:

  1. Ambulatory patient services
  2. Emergency services
  3. Coverage for hospitalization
  4. Care for pregnant women and newborn babies
  5. Mental health and substance use disorders, including treatment for behavioral health issues
  6. Prescription drugs
  7. Rehab services
  8. Laboratory services
  9. Preventive and wellness services
  10. Management for chronic illnesses
  11. Pediatric services, including vision and dental care

In order to be included in the Health Insurance Marketplace, all plans must offer these core health benefits. States that choose to expand Medicaid must also ensure that their programs cover these core benefits.

The Health Insurance Marketplace includes a number of different plans to meet the individual needs of each person. These plans include HMO, EPO, PPO and POS. Those shopping for coverage will need to do their homework and choose a plan that is right for their needs.

The Health Insurance Marketplace also includes a number of different cost sharing categories. There are five distinct categories, or "metal levels" available in the Marketplace. The plans within each category pay different amounts toward the total cost. Individuals shopping for a plan will need to consider a number of factors, including the monthly premium, the required co-payments, the annual deductible and the out-of-pocket maximums. The actual percentage the covered person must pay for each covered service will depend on the services used throughout the year. Here is a breakdown of the five plan categories:

  • Bronze: The health plan pays an average of 60%. You pay about 40% of the cost.
  • Silver: The health plan pays an average of 70%. You pay approximately 30% of the cost.
  • Gold: The health plan pays an average of 80%. You pay about 20% of the cost.
  • Platinum: The health plan pays an average of 90%. You pay about 10% of the cost.
  • Catastrophic: Catastrophic plans pay less than 60% of the total cost on average. These plans are only available to individuals who are under 30 years old or who qualify for a hardship exemption.

Factors to Consider When Choosing a Plan Category

There are a number of things to consider when choosing a plan category. Some things to consider:

  • Individuals who expect to visit the doctor frequently and those who use maintenance prescriptions may be happier with a Gold or Platinum plan. These plans typically have higher monthly premiums, but they also pay a higher percentage of costs.
  • If you expect to visit the doctor only rarely and take no prescription medications, you may be better off with a Silver, Bronze or Catastrophic plan. These plans typically have the lowest monthly premiums, but they also pay less for covered services.
  • If you qualify for lower out-of-pocket costs a Silver plan may offer the best value. Individuals with limited incomes may qualify for lower out-of-pocket costs, but those cost savings are available only for those who choose a Silver plan. The lower out-of-pocket costs can provide the benefits of a Gold or Platinum plan with the premiums of a Silver one.
  • Individuals under 30 years of age and those who qualify for hardship exemptions may want to choose a catastrophic plan. Catastrophic plans are designed to protect you from a worst-case scenario, like a serious illness or lengthy hospital stay.
  • Catastrophic plans typically have the lowest premiums, but they also require the highest out-of-pocket costs. If you choose a catastrophic plan, you will have to pay all of your medical costs up to a specified amount - typically several thousand dollars. This amount is known as the deductible. After you reach the deductible, the catastrophic plan typically pays for essential health benefits.

    Catastrophic Plans and Prevention and Primary Care Benefits

    Catastrophic plans within the Health Insurance Marketplace must cover three primary care visits per year at no cost, even for individuals who have not yet met their deductible. The plans must also provide free preventive services.

    You will not be eligible for premium tax credits or lower out-of-pocket costs if you choose a catastrophic plan. No matter what your income, you will be responsible for the full cost of the monthly premium. If you think you may be eligible for a premium tax credit, it is best to shop around before choosing a catastrophic plan.

    Catastrophic Plans and Hardship Exemptions

    Individuals who are 30 years old and older with a hardship exemption are eligible to purchase a catastrophic plan. Eligibility for a hardship exemption is based on a number of factors, including household income, that would otherwise prevent people from getting coverage.

    If you previously had an individual health plan that was cancelled and you believe that none of the plans offered by the Health Insurance Marketplace are affordable, you may qualify for a hardship exemption. If you qualify, you can buy a catastrophic plan to meet your health insurance needs.

    The various plans offered by the Health Insurance Marketplace offer different levels of coverage for care you receive both inside and outside the plan's network of doctors, pharmacies, hospitals and other service providers. There are also differences in coverage between plan types. It is important to shop carefully and make sure you fully understand your coverage options.

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