Get to Know the Features of America’s Affordable Care Act Health Insurance Plans

Affordable Care Act

Get to Know the Features of America’s Affordable Care Act Health Insurance Plans

Published on June 27, 2013

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affordable care act featuresAs of January 1, 2014, the way health insurance benefits are structured changed forever. To shop smart, consumers need to understand what benefits every plan they enroll in must have in order to help avoid the mandate tax.

What’s covered in the Affordable Care Act?

Each new health insurance plan will cover at least 10 health benefits deemed to be essential under the Affordable Care Act (ACA). Before the ACA became law, eHealth built its own list of eight “essential” benefits and tracked the percentage of plans that covered them.
This table breaks down the new ACA list, eHealth’s prior list, and how often the essential benefits would be covered:

ACA 10 essential health benefits

Percentage of qualified plans covering EHBs

eHealth’s comprehensive benefits in 2012

Percentage of plans sold by eHealth in 2012 covering comprehensive benefits

Laboratory services

100%

Laboratory and x-ray

99.2%

Emergency services

Emergency services

99.7%

Prescription drugs

Prescription drugs

88.1%

Mental health and substance-use disorder services

Chiropractic

70.9%

Maternity and newborn care

Maternity

18.9%

Pediatric services, including oral and vision care

Well baby care

87.1%

Rehabilitative and habilitative services and devices

OB/GYN

90.5%

Ambulatory patient services

Periodic exams

88%

Preventive and wellness services and chronic disease management

Hospitalization

 

How much is covered under Affordable Care Act? 

All ACA-compliant plans have a “metallic” benefit level designed to allow consumers to make more informed decisions when comparing plans.
The metallic benefit levels start at a minimum of 60% and go up to 90% of the plan’s “actuarial value.” The actuarial value is equal to the percentage of total average costs for covered benefits that a plan will pay.
A plan with a 60% actuarial value would pay for an average of 60% of all covered medical costs and the customer would be responsible for 40% of covered medical costs. Insurers may also offer catastrophic-only plans to eligible individuals, which would have higher cost-sharing than the standard metallic plans
These are the metallic designations:

Metallic Designation

Actuarial Value

Catastrophic

<
60%

Bronze

60%

Silver

70%

Gold

80%

Platinum

90%

 

How does cost-sharing work?

The law also limits out-of-pocket costs like coinsurance, co-pays and deductibles. If your income is below 400% of the Federal Poverty Level (FPL), the ACA places tighter restrictions on your cost-sharing and uses additional subsidies to cap your out-of-pocket costs.
The ACA restricts the out-of-pocket limit on all plan’s to the amount allowed for health plans with Health Savings Accounts (HSAs): $6,850 for an individual and $13,200 for a family in 2015.
These numbers may seem high, but if your income is at or below 400% of FPL then your out-of-pocket liability is capped. Cost-sharing that exceeds the limits set for your household income are subsidized at the levels outlined in this chart:

2016* Federal Poverty Level Income *Reduction in Out-of-Pocket Liability
138-200% FPL Two-thirds of the HSA maximum
  • Individual Income: $16,243 to $23,540
  • Family of Four Income: $33,465 to $48,500
  • Max Out of Pocket: $2,250
  • Max Out of Pocket: $4,500
200-250% FPL One-half of the HSA maximum
  • Individual Income: $23,540 to $29,425
  • Family of Four Income: $48,500 to $60,625
  • Max Out of Pocket: $5,450
  • Max Out of Pocket: $10,900
Over 250% FPL One-third of the HSA maximum
  • Individual Income: $29,425 to $47,080
  • Family of Four Income: $60,625 to $97,000
  • Max Out of Pocket: $6,850
  • Max Out of Pocket: $13,200
*This table uses 2015 HSA limits and FPL income levels..

These reductions in out-of-pocket liability have been achieved in current plans through a variety of cost-sharing methods, including copayments, deductibles, and coinsurance. As such, two plans with the 60% bronze “actuarial value” may have the same out-of-pocket limit, but be structured differently.
The following table shows an example created by Aon Hewitt for the Kaiser Family Foundation in their April 2012 report “Patient Cost-Sharing Under the Affordable Care Act”:

Tier

Actuarial value

Deductible

Coinsurance

Out-of-pocket limit

Bronze 1 60% $4,375 20% $6,350
Bronze 2 60% $3,475 40% $6,350
Silver 1 70% $2,050 20% $6,350
Silver 2 70% $650 40% $6,350

 

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