Everything You Need to Know
Being smart about your health insurance decisions starts at being informed. So we created this compilation of our most frequently asked questions about the Affordable Care Act (also known as the ACA and Obamacare) to help you make choices you feel good about.
The only way to obtain an Obamacare plan outside of the Open Enrollment period is during the Special Enrollment Period. Those who have certain life changes, known as "Qualifying Life Events", are eligible for Special Enrollment. The Special Enrollment Period lasts for 60 days following a Qualifying Life Event.
You could substantially save on your plan’s monthly rate if you qualify for the Premium Tax Credit. The Premium Tax Credit was created to help make insurance affordable for all. Specifically, if you meet certain income guidelines (more on this below), the federal government will help pay for - or subsidize – your monthly insurance bill. The payment is made directly to the insurance company on your behalf. Think of it like a discount applied on top of your plan. Generally speaking, those with lower incomes qualify for a larger Premium Tax Credit, and will pay less per month. All four metal plans (more on this below) can receive the Premium Tax Credit.
Cost-Sharing Reductions can help you save even more by lowering your out-of-pocket costs. Like the Premium Tax Credit, you must meet certain income guidelines to qualify for Cost-Sharing Reductions. Similarly, those with lower incomes tend to receive a greater reduction amount, meaning they would pay less out-of-pocket for deductibles and co-payments (e.g. when using their insurance). Note that Cost-Sharing Reductions are only available with a Silver plan. Those who qualify for both the Premium Tax Credit and the Cost-Sharing Reduction can substantially lower their total cost for health coverage. Many find that it is "the best of both worlds,” meaning they pay the low monthly rate of a Bronze plan, while paying the low out-of-pocket costs of a Gold plan. Not surprisingly, Silver plans have become very popular for this reason.
- Ambulatory care;
- Emergency services;
- Hospital coverage;
- Maternity and newborn care;
- Pediatric services (including dental and vision);
- Mental health and addiction treatment;
- Prescription drug benefits;
- Rehabilitative coverage;
- Laboratory services; and
- Preventative services and chronic disease management.
When compared to the other three plans, Bronze plans typically have the lowest monthly insurance premiums. However, Bronze plans also tend to have the highest out-of-pocket costs and deductibles when using health insurance. Bronze will cover 60% of your health care costs, while you would be responsible for the remaining 40%, in addition to your monthly premium.
Example: You break your arm and need surgery, which costs $20,000. With a bronze plan, your insurance would pay $12,000 and you would be responsible for $6,850. This is because the annual maximum out-of-pocket limit for all ACA health plans is $6,850, even though the remaining balance is actually $8,000. This is in addition to your monthly premiums.A Bronze plan could be the right choice if you:
- Want the lowest monthly premium possible and do not qualify for a Catastrophic plan.
- Anticipate rarely needing non-preventative medical services.
- Foresee rarely taking prescription medication.
- And do not mind paying more out-of-pocket in the event you need non-preventative medical care, including a sickness or major medical emergency.
Silver plans are another one of four "metal" levels of coverage established by the Affordable Care Act. These plans have proven to be very popular. In fact, 70%† of enrollees chose a Silver plan during the 2015-2016 Open Enrollment. Silver plans tend to have affordable monthly insurance premiums. However, their out-of-pocket costs are still more expensive than a Gold or Platinum plan. Specifically, 70% of your medical expenses are paid for by a Silver plan, meaning that you will have to pay for the remaining 30% of these costs. Example: For the arm surgery mentioned above that costs $20,000, your insurance would pay $14,000 and you would be responsible for the remaining $6,000. This is in addition to your monthly premiums. As we mentioned above, Silver plans are the only ones that are eligible for the Cost-Sharing Reduction, or when the government helps pay for out-of-pocket health care costs such as coinsurance, copayments, and deductibles. To qualify for the Silver plan’s Cost-Sharing Reductions, your income must be at or below 2.5x the Federal Poverty Line.Silver plans are popular and could be the right choice if you:
- Are willing to pay a little more for a monthly premium so you can pay a little less out-of-pocket when using medical services.
- Anticipate needing some non-preventative medical services.
- Foresee taking some prescription medication.
- Or, you qualify for Cost-Sharing Reductions that lower your out-of-pocket costs. For those who qualify, many find that their total costs of health care tend to be much more affordable. Though they pay a monthly premium that is a little higher than a Bronze plan, the out-of-pocket costs are similar to those of a Gold plan and are much lower.
Gold plans are one of the four “metal” options established by the Affordable Care Act. These plans can make sense if you regularly need medical care. Gold plans typically have higher monthly insurance premiums than Bronze and Silver plans, however, they do have lower out-of-pocket costs when using medical services. The plan pays for 80% of your medical expenses, while you would be responsible for the remaining 20%, along with your premium.
Example: Going back to the arm surgery example above that costs $20,000, with this type of plan your insurance would pay $16,000 and you would be responsible for the remaining $4,000. This is in addition to your monthly premium.A Gold plan could be the right choice if you:
- Would rather pay a higher monthly premium if it means you will pay less out-of-pocket when visiting the doctor, going to the emergency room, or using other health care services.
- Anticipate needing regular medical care.
- Already take or anticipate needing to regularly take prescription medication.
Platinum plans are one of the four "metal" health plans established by the Affordable Care Act. They are meant to help lower the out-of-pocket costs of those who need very frequent and/or major medical services. Platinum plans tend to have the highest monthly insurance premiums of all metal plans. However, they also have the lowest out-of-pocket costs when you need medical care. Platinum plans pay for 90% of your medical expenses, meaning you are responsible for the remaining 10%. Such low out-of-pocket costs can prove to be financially beneficial for those who need a high-level of medical care.
Example: Referring back to the arm surgery example from above that costs $20,000, with this type of plan your insurance will pay $18,000 and you would be responsible for the remaining $2,000. This is in addition to your monthly premiums.A Platinum plan could be the right choice if you:
- Anticipate needing very frequent and/or major medical care.
- Foresee taking prescription medications on a frequent basis.
- Prefer paying a higher monthly premium if it means you will pay less out-of-pocket when visiting the doctor, going to the emergency room, or using other health care services.
Catastrophic plans are a fifth type of plan. Although they have the lowest monthly cost, the benefits are primarily limited to emergency situations, and you must meet certain eligibility requirements. As their name suggests, these plans provide health coverage during "worst-case "emergency scenarios. Catastrophic plans have the most affordable monthly rates, even lower than the rates of Bronze plan, however, their out-of-pocket costs tend to be the highest. Also unlike the metal plans, preventive care benefits are limited. To qualify for a Catastrophic plan, you must either be under the age of 30, or have a hardship exemption at any age.You may qualify for a hardship if you are experiencing:
- An eviction/foreclosure;
- A notice of shutoff from your utility company;
- Domestic violence or a death in the family;
- A natural or man-made disaster.
- Bankruptcy or substantial debt from medical expenses;
- An increase in expenses due to caring for an ill, disabled, or aging family member;
- Claiming a child as a tax dependent who was denied Medicaid or CHIP;
- If you won an appeal for previously being denied a qualified health plan, but were denied eligibility at the time;
- You lost coverage in the past, but found qualified health plans to be unaffordable;
- Some other hardship related to obtaining health insurance.
The Affordable Care Act is a set of health care reform legislation. It comprises of the Patient Protection and Affordable Care Act and the Health Care and Reconciliation Act, both of which were signed into law in March of 2010. Commonly, the Affordable Care Act is known as "Obamacare." The purpose of the Affordable Care Act was to provide all Americans, including those with lower incomes, with affordable, accessible, and quality health coverage. It accomplishes these by lowering health care costs and premiums, expanding access to Medicaid, applying stricter regulations to insurers, and ensuring that all reformed plans meet a certain high-standard of quality health care (see next section for more).
Prior to reform, millions of Americans were unable to purchase health insurance because it was either too expensive or unavailable. Insurers would either increase rates for those with pre-existing conditions or deny them coverage completely. Insurers would also set maximum lifetime benefits, resulting in many Americans losing their coverage once they became too expensive to insure. Now, with health care reform, the government not only helps pay for the monthly premiums of those with lower incomes, but also makes certain that for everyone, insurers can no longer deny coverage for preexisting conditions, or drop your coverage when you become too costly to insure.With reform, most Americans are required to have coverage or face a tax penalty. Requiring most to have coverage helps keep health care costs down for all. The reason is that those who do not need medical care at a given moment are helping pay for those who do. Only plans that meet the standard of Minimum Essential Coverage exempt you from paying the tax penalty.
- Ambulatory care
- Emergency services
- Hospital coverage
- Pregnancy/maternity and newborn care
- Pediatric services (including dental and vision)
- Mental health and addiction treatment
- Prescription drug benefits
- Rehabilitative coverage
- Laboratory services
- Preventative services and chronic disease management
All four types of plans provide the same quality care. The difference among plans is how much you pay per month versus how much you pay when using the insurance. Bronze plans have lower monthly premiums, but higher out-of-pocket costs when needing medical care. Platinum plans are the exact opposite, where you pay more per month, but have a lower out-of-pocket rate. There is also a fifth type, known as a Catastrophic plan, but you must be under the age of 30 or must be facing certain hardships to qualify. Catastrophic plans have the lowest monthly premium, yet have high out-of-pocket costs.