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.
As with all four plans, your monthly premium could be lowered greatly if you qualify for the Premium Tax Credit. The Premium Tax Credit is like a discount that is paid for by the government and applied to your monthly insurance rate. The main factor in determining your eligibility is your annual household income. Depending on the state you live in, your income must be at or below 4x the Federal Poverty Line to qualify for the Premium Tax Credit.
Remember that the only difference among plans is the amount you pay, not the quality of health care you receive. By law, all four plans must meet the Ten Essential Health Benefits, which includes a free wellness visit and preventative care.
Keep in mind that under Obamacare, all plans have the same maximum out-of-pocket limits no matter which metal level you choose. These limits protect you financially, especially if you need a lot of medical care. For 2016, the annual limit is $6,850 for an individual, and $13,700 for a family, including deductibles. Platinum plans pay for 90% percent of covered medical expenses before reaching the limit, and then 100% of all covered expenses after reaching the limit.
If you find that the monthly premiums are too high with a Platinum plan, but still require relatively lower out-of-pocket costs, consider a Gold plan. If you think most of your medical care will be preventative, consider a Silver or even a Bronze plan.