5 Things You Should Know About The New Health Insurance Marketplace
AAA
  1. 5 Things You Should Know About The New Health Insurance Marketplace
  2. All Marketplace plans must cover Essential Health Benefits
  3. If you can afford it, you will need minimum essential coverage
  4. Important Dates to Know

5 Things You Should Know About The New Health Insurance Marketplace

When Obamacare, otherwise known as the U.S. Health Care Reform Act, goes into effect January 1 next year, Americans will be faced with yet another way to find and buy health insurance. For the 50 million who don’t get health insurance through their employers or Medicare or Medicaid or on the private market, they’ll have to buy it through the new health insurance Exchanges. Those who don’t have health insurance and don’t buy it will face a federal fine. Blue Cross, Cigna (NYSE:CI), Humana (NYSE:HUM) and Kaiser among others will sell insurance to those who don’t already have it. They must follow standards set out in the federal act.

For some who are currently buying insurance on the private market, the exchanges may offer lower premiums and lower out-of-pocket costs. Some employers have already announced they plan to end insurance plans for certain employees and instead send them to the Exchanges. October 1 is the first date you can sign up; enrollment ends March 31, 2014. Here are five things you should know about the new Exchanges, also called the Health Insurance Marketplace.

1. There are four health plan categories – Bronze, Silver, Gold and Platinum

The Marketplace plans are separated into four primary levels: Bronze, Silver, Gold and Platinum.

The different levels are intended to meet various health and financial needs, and are based on the percentage that each plan pays towards health care services. The plan levels also indicate the percentage you will pay towards the health care you receive. Your portion of these costs is in the form of:

  • Deductibles – the amount you owe for covered services before insurance kicks in;
  • Copayments – a fixed amount you pay for a covered health care service; and
  • Coinsurance – your share of the costs of a covered health care service.

For example, assume you have a $1,000 deductible, a $25 copayment and coinsurance of 20%. For some health care, such as a visit to your family doctor, you will owe the $25 copayment. For other services, such as a surgery, you must first meet your deductible, after which you will owe 20% of the costs. If the surgery cost $5,000, you would be responsible for the first $1,000 (to meet your deductible if you haven’t already done so) and then 20% of the remaining charges, or, in this example, $800.

This chart shows how much the different plans will pay of your health costs, not including premiums:

Plan Level What the Plan Spends What you Spend
Bronze 60% 40%
Silver 70% 30%
Gold 80% 20%
Platinum 90% 10%

The lower the amount of coverage, the lower the premium you must pay to maintain coverage. Bronze level plans have the lowest premiums, but also the lowest level of coverage. As the plan levels increase (from Bronze to Silver to Platinum), your monthly premium increases but so does the level of coverage. For example, you will pay a higher premium for a Platinum plan but you will pay less for each doctor visit, prescription, or health care service that you use.

Tip: If you expect to have a lot of doctor visits and require regular prescriptions, you may want to consider a Gold or Platinum plan. If you don’t expect to have a lot of health care bills, a Bronze or Silver plan may be appropriate. You will be able to compare plans on the Marketplace to find one that best fits your financial and health needs. Plans and costs vary by state and individual.

All Marketplace plans must cover Essential Health Benefits

  1. 5 Things You Should Know About The New Health Insurance Marketplace
  2. All Marketplace plans must cover Essential Health Benefits
  3. If you can afford it, you will need minimum essential coverage
  4. Important Dates to Know
RELATED TERMS
  1. Basket Deductible

    A single deductible that is designed to pay for losses from different ...
  2. Associate In Fidelity And Surety Bonding (AFSB)

    A designation earned by bond producers, bond underwriters, and ...
  3. Bare Walls Coverage

    A type of insurance coverage that applies to communally used ...
  4. Contents Rate

    The premium required to insure the contents of a property rather ...
  5. Corporate Reimbursement Coverage

    A feature of liability insurance that covers the insured company ...
  6. Coverage Trigger

    An event that must occur in order for a liability policy to apply ...
  1. What is revenue cycle management?

    Learn more about revenue cycle management and why the healthcare industry in particular has adopted this payment process ...
  2. How did Johnson and Johnson's corporate responsibility policy pay off in 1982?

    How did Johnson & Johnson recover from the tainting of its Extra-Strength Tylenol capsules in 1982? It adhered to its corporate ...
  3. What other sectors besides utilities are known as defensive?

    See why certain sectors, other than utilities, are considered defensive and therefore more resistant to the downturns of ...
  4. What is an equity-indexed annuity?

    Understand what an equity-indexed annuity is, its advantages and disadvantages, and how it differs from other annuity investments.

You May Also Like

Related Tutorials
  1. Home & Auto

    Introduction To Insurance

Trading Center