The types of health insurance plans you purchase are being reclassified and renamed, meaning they will be placed into categories or “tier” levels that will be described as “Metal Plan” Tiers. The reason they are called metal tiers is because the tier names are based on actual metals; Platinum, Gold, Silver and Bronze. The best health insurance plans with the best benefits are the Platinum tier plans; and obviously, the least expensive health insurance plans with the least or minimum benefits will be the Bronze tier plans.
The tiers are based on something called "Actuarial Value" (AV), which is a term comparing how much a person is expected to spend on medical services every year and how much of the cost is actually paid by the health plan and by the person. You can think of it this way: if you are expected to have $10,000 in medical expenses in a year, a Gold tier health plan at 80% of AV will pay for $8,000 of your medical expenses and you will pay the other $2,000.
What does all this mean in actual dollars; no one is really sure at this point in time. Starting October 1, 2013 when the government health insurance marketplaces are scheduled to be up-and-running; a person can go to their web site or call them and get detials on the co-payments, dedcutibles and cost of the health insurance plans. Basically; the general categories are:
Platinum Plans cover 90% of expected costs.
Gold Plans cover 80% of expected costs.
Silver Plans cover 70% of expected costs.
Bronze Plans cover 60% of expected costs.
There will also be a limit as to how much each person and each family will spend out of thier pocket for In-Network medical expenses per year. The maximum annual out-of-pocket expensesduring the year for individuals and families is based on the HSA guidelines; and is expected to be $6,350 for an individual and $12,700 for a family in 2014.
The minimum health insurance plan that a person is required to purchase is a Bronze tier health insurance plan; otherwise, a person could be subject to a penalty for not purchasing health insurance. The Bronze tier does appear to be similar to what many people have today based on general market research. In fact, the Bronze tier may be better than most people have today, because of the new requirement to have all health insurance plans cover a minimum set of benefits.
Special Silver Tier Alternative Plans
There will be three additional Actuarial Value health insurance plan options available for people with incomes between 100% and 250% of FPL. These additional options are available so that people with lower incomes can get a better health insurance plan and still get the federal subsidy when buying a health insurance plan through a government health insurance marketplace. A person must buy a Silver tier health insurance plan in order to get the additional financial assistance to get one of these health insurance plans. These three alternative health insurance plan options are only available for people that have the lower incomes. The three health insurance plans have lower out-of-pocket expenses for people that are enrolled in the health insurance plan. Basically, what this all means is that even though you are buying a Silver Tier plan; you are actually being given a better health insurance plan.
The three alternative Silver Plans are as follows:
100-150% of FPL = 94% AV, better than average Platinum Plan
150-200% of FPL = 87% AV, better than average Gold Plan
200-250% of FPL = 73% AV, better than average Silver Plan