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Understanding Obamacare in 2014

Learn about the four different health care 'marketplaces' offered by insurers starting next year.

By Smart Spending Editor May 28, 2013 5:44PM
This post is by Barbara Marquand from partner site

MSN Money PartnerBefore you start shopping for health insurance for 2014, learn the difference among platinum, gold, silver and bronze -- the names for new standardized health plans that will be sold through "marketplaces."

USA, Mid-Atlantic USA, New Jersey, Businessman looking at piggybanks standing on desk © Jamie Grill, Tetra images, Getty ImagesHealth plans sold through the state and federally operated health insurance marketplaces, formerly known as exchanges, will be standardized to make it easier to compare prices and benefits.

The National Conference of State Legislatures has state-by-state information on marketplaces.

All the plans must offer the same core package of essential benefits, such as coverage for prescription drugs, maternity and newborn care, lab services, emergency services and preventive and wellness care. None of the plans can deny coverage or charge higher premiums for pre-existing conditions, meaning illnesses or conditions you already have.

The difference between the four choices will boil down to something called "actuarial value."

Simply put, it's how much of the total costs of covered benefits the insurer will pay for an average person.

If a plan has an actuarial value of 60%, the insurer will cover roughly 60% of the tab and you will pay 40% out of pocket. Your out-of-pocket costs include the amount of the deductible, co-insurance (the percentage of the medical bill you pay after the deductible is met) and office visit co-payments. The premiums you pay for insurance don't count as part of the out-of-pocket percentage.

Here's how the four basic types of plans break down:

    •    Bronze - Pays 60% of the costs. You pay 40%.
    •    Silver - Pays 70%. You pay 30%.
    •    Gold - Pays 80%. You pay 20%.
    •    Platinum - Pays 90%. You pay 10%.

Premiums will generally be lower for bronze and silver plans than for gold and platinum plans, but you'll pay higher deductibles and co-payments for medical care.

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Health insurance companies in the "marketplaces" don't have to offer a plan at every level, but they must offer at least one silver plan and one gold plan in each marketplace where they participate.

Besides the bronze, silver, gold and platinum plans, health insurers can offer a catastrophic plan, which will pay for a lower percentage of costs than the bronze plan. Catastrophic plans will carry lower premiums than the bronze, silver, gold or platinum plans, but will have higher out-of-pocket costs for medical care.

Catastrophic plans will be available only for people under age 30 and people who are exempt from the individual mandate because the cost of a standardized health insurance plan would exceed 8% of their income. The individual mandate is the Affordable Care Act provision that requires almost everyone to have health insurance starting in 2014.

Insurers can also sell plans directly to consumers outside the exchanges, and many employers will continue to offer health insurance through their employee benefit packages.

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May 28, 2013 7:23PM

You forgot the "Welfare" plan.

Your lazy *ss gets 100% coverage for free and the taxpayers get the bill.

May 29, 2013 9:39AM
Still has done nothing to lower extravagant medical costs. So what has changed? except more ways to TAX.
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