February is Wise Health Consumer Month – an observance designed to help business owners, employees, individuals, and families better understand their health-insurance options. This year’s Wise Health Consumer Month is particularly timely, because open enrollment in the Affordable Care Act’s Health Insurance Marketplace – as well as in state health insurance exchanges – ends on March 31 of this year.
Words Worth Knowing
For those who are in the midst of comparing coverage options, it’s best to first refresh your health-insurance vocabulary:
• Premium – the amount of money that must be paid for your health-insurance plan. You and/or your employer usually pay the premium monthly, quarterly, or annually.
• Coinsurance – your share of the costs of a covered health-care service, calculated as a percent (for example, 20%) of the allowed amount for the service. You pay coinsurance plus any deductibles that you owe. For example, if the health plan’s allowed amount for an office visit is $100, and you’ve met your deductible, your coinsurance payment of 20% would be $20.
• Copays – a fixed amount (for example, $15) that you pay for a covered health-care service, usually when you receive the service.
• Deductible – the amount you owe for health-care services that your health plan covers, before your health begins to pay. For example, if your deductible is $1,000, your plan won’t pay for anything until you’ve met your $1,000 deductible.
As a general rule, lower monthly premiums are accompanied by higher copays, coinsurance, and deductibles. Similarly, plans with higher premiums, will have lower copays, coinsurance, and deductibles.
Marketplace Insurance Plans – Four Categories
Insurance plans available through www.HealthCare.gov – or through one of the state health insurance exchanges, such as www.coveredca.com – are divided into four categories: bronze, silver, gold, and platinum.
All Health Insurance Marketplace plans offer the same set of “essential health benefits,” including: emergency services; hospitalization; laboratory tests; maternity and newborn care; mental-health and substance-abuse treatment; outpatient care; pediatric services (including dental and vision care); prescription drugs; preventive services (such as immunizations and mammograms) as well as management of chronic diseases, such as diabetes; and rehabilitation services.
What distinguishes the four categories from each other are their associated premium costs and the portion of charges that you must pay for things like hospital stays or prescription medications. The category selected also affects your total, annual out-of-pocket costs.
To better understand the differences between categories, HealthCare.gov offers these guidelines:
• Premiums are usually higher for plans that pay more of your out-of-pocket costs. For example, Platinum plans will probably have the highest monthly premiums, but the percent of expenses paid by the individual is 10%. Similarly, a Gold plan will likely have a higher premium, but the individual pays 20% of expenses. Consequently, if you anticipate the need for numerous doctor visits and other services, your best choice may be a Platinum or Gold plan.
• With Silver and Bronze plans, you’ll likely pay a lower premium, but you’ll pay a higher share of the costs when you receive care – 30% for Silver – and 40% for Bronze. If you don’t need frequent doctor visits or other ongoing health-care services, a Silver or Bronze plan may work for you.
It also should be noted that individuals and families may qualify to pay lower rates for their coverage based on how much an individual earns, and – in the case of a family – the family’s size and income.
Share these reminders with your employees, and contact your Health Net broker if you have additional questions.