Did you know the ACA was going back to being like it was 20 years ago with prices of Cadillac plans?
"I think there will be a lot of people very happy and satisfied with what they have," said Joel Ario, formerly the director of the Office of Health Insurance Exchanges at the Department of Health and Human Services and now a managing director at Manatt Health Solutions. "But there may be those who say, 'Nobody told me about the deductible on the bronze plan.' People are going to say the cost-savings measures are too high, particularly around some of the drug plans."
Ario and others who helped create and implement the law said they knew it was a move toward consumers having "more skin in the game," because they will have to weigh the costs and benefits of medical procedures.
"For people who think the ACA takes care of everything for you, you'll find it's more like 20 years ago, where it takes care of the serious things," Ario said. "But they're not going to go bankrupt anymore. It's far better to owe $5,000 in the deductible than have a bill from the hospital saying you owe $100,000 or more."
People will also continue to question the limited networks, he said. Some of the plans keep their costs down by saying consumers may only see certain doctors, or else pay more, and consumers need to understand that better both while shopping for plans and while seeking treatment.
Bronze Plan – Affordable Care Act (Obamacare)
What Is the Bronze Plan?
The Affordable Care Act, otherwise known as Obamacare, requires insurance companies in 2014 to offer new categories of health insurance plans to consumers: Bronze, Silver, Gold, and Platinum. These plans will all offer a minimum standard of benefits determined by the government. This minimum standard is known as the plan’s "essential health benefits."
Generally speaking, the Bronze Plan is intended to have the lowest premium of the 4 new categories of plans but charge the highest out-of-pocket costs for healthcare services. For people without group insurance from an employer or other group, the Bronze plan is the minimum health insurance plan in which they can enroll that will satisfy the Affordable Care Act’s mandate for people to purchase health insurance.
What Are The Bronze Plan’s Out-of-Pocket Costs?
Bronze Plans are designed so that insurance companies will pay 60% of covered healthcare expenses with the remaining 40% to be paid by consumers. The consumer’s expenses will be in the form of out-of-pocket fees over and above the cost of the plan’s monthly premium. Out-of-pocket expenses in 2014 are capped at $6,350 for individual plans and $12,700 for family plans.
The 40/60 percentages are based on projected use of healthcare services by plan members. The actual out-of-pocket expenses of any single beneficiary may work out to be more or less than this ratio but should remain within the range. Those people whose out-of-pocket limits reach the annual maximum could see their share of healthcare costs fall until a new calendar year begins and the annual limit reset.
Out-of-pocket expenses include fees like deductibles, copayments, or coinsurance. Different plans will approach the 40/60 split in various ways (see the table below) so it is important to research the financial details of a specific plan before deciding which one to purchase. For example, a person who has frequent medical expenses may want a Bronze Plan with a lower deductible (depending on premium) while a healthy person may want the opposite.
|Cost-Sharing Category||Average for a Bronze Plan|
|Deductible for an individual enrollee||$5,081|
|Deductible for a family||$10,386|
|Doctor Visit||30% of doctor visit expense charged to patient as coinsurance fee* (coinsurance fees used for doctor visit in 54% of plans studied)|
|Generic drugs||32% of generic drug expense charged to patient as coinsurance fee|
|Preferred brand drugs||35% of preferred brand drug expense charged to patient as coinsurance fee|
|Non-preferred brand drugs||36% of non-preferred brand drug expense charged to patient as coinsurance fee|
|Specialty drugs||34% of specialty drug expense charged to patient as coinsurance fee|
|Specialist visit||30% of specialist visit expense charged to patient as coinsurance fee|
|Annual cap on out-of-pocket costs for an individual||$6,267|
|Annual cap on out-of-pocket costs for a family||$12,569|
* Doctor visit charges vary based on length and whether you are an existing patient or new patient. For reference, a cost estimate for a doctor visit in the Boston area by an established patient is $138.1
Below is an illustration of how costs could differ among Bronze plans for an individual enrollee.
|Bronze Plan Example #1||Bronze Plan Example #2||Bronze Plan Example #3|
|Plan||Anthem Blue Cross of California - Bronze Plan (PPO)||United Healthcare - New York Standard Bronze (EPO)||Aetna - ADVANTAGEPLUS 5500 PD|
|Doctor Visit Fee||$60||50% of cost||10% of cost|
|Coinsurance Fee||30% of cost||50% of cost||10% of cost|
|Annual Limit on Out-of-Pocket Expenses||$6,350||$6,350||$6,350|
For some plans, the consumer’s share of expenses may come in the form of large deductibles (e.g. above $5,000) with low out-of-pocket costs for services received after the deductible is satisfied. For other plans, the deductible might be low but the consumer would be responsible for 40% of the cost of every covered medical service he or she receives.
The examples above show significant differences between deductibles and coinsurance even though the plans offer the same essential benefits and cap the maximum out-of-pocket expenses at $6,350 in 2014. It’s also important to remember that coverage depends on you using the plan’s approved healthcare providers. Using a doctor or hospital outside of that network could result in significantly higher costs.
It is estimated that the Bronze Plan requires higher cost-sharing for consumers than the typical employer-based plan. Moreover, people who are insuring family members along with themselves will have higher out-of-pocket limits as well as higher premiums. However, with respect to families, the income limits for government subsidies are also higher.
Bronze Plan Premiums
Bronze plans have the lowest premium rates of the four new types of metal plans since they charge the highest out-of-pocket costs. However, there may be instances where the Silver Plan for one insurance company may charge a lower premium than the Bronze Plan of another insurance company. Comparison shopping will be essential for anyone who wants to minimize their healthcare expenses. HealthPocket’s health insurance comparison tool allows people to compare all the plans available in their area.
Below are the average monthly premiums found for 30, 40, 50, and 60-year-old individuals in Bronze plans across 34 different states.
|Age 30||Age 40||Age 50||Age 60|
The Affordable Care Act caps deductibles on small business health plans at $2,000 for individual enrollees and $4,000 for families. However, in February 2013 the Department of Health and Human Services permitted small group health insurance plans to exceed the deductible caps if it was necessary to maintain the appropriate percentage of out-of-pocket costs for enrollees. HealthPocket found the following average out-of-pocket costs for bronze plans in the small business market.
|Cost-sharing category||Average for a Bronze Plan|
|Medical deductible for individual enrollee||$4,216|
|Medical deductible for family||$8,667|
|Primary care visit||33%|
|Annual cap on out-of-pocket costs for an individual||$6,224|
|Annual cap on out-of-pocket costs for a family||$12,518|
The average deductibles for Bronze plans exceeded both the $2,000 individual and $4,000 family deductible caps. In fact, nearly all Bronze plans exceeded the deductible caps for both individuals and families.
Did this really help anyone besides insurance companies? How many people will truly benefit from a major medical policy with high deductibles and high monthly payments?