A Common Gal Looks at ObamaCare, Part 6: Four Levels of Coverage

A Common Gal Looks at ObamaCareI’m reading up on The Patient Protection and Affordable Care Act (“ObamaCare” … although I supposed I really should start using the real acronym, PPACA, instead of the nickname conservatives gave it). That includes the act itself, amendments passed shortly afterward, and the recent Supreme Court ruling. It’s a lot of pages (906, 55, and 193 respectively), but I want to understand it. I’m documenting my read-through here. I am not a lawyer or a healthcare professional, just a common college-educated person. These are my thoughts, not advice to you. Read the act yourself like the free person you are. ;o).

Different levels of healthcare coverage are defined in the Affordable Care Act: bronze, silver, gold and platinum.[1]

Fretful writer side note: I wish that authors of legislation (and authors in general) would get more original than using metals or jewels (*yawn*) to create memorable scales of intensity. Why not go with increasingly hard woods? Balsa, Magnolia, Pecan, Ebony. Besides, I’d love to hear a Republican defend a “balsa plan” as being good enough for the poor — or see a white conservative gladly signing on for an “ebony plan.”

Ahem. Anyway …

I attempt to translate legalese into people-speak, below. Note that “actuarial value” means “the percentage of total average costs for covered benefits that a plan will cover.” So if your plan has an actuarial value of 70%, then you have a 70/30 plan (you pay the 30% for all covered benefits). (Thank you, healthcare.gov, for coming to my rescue again with your understandable definitions.)

Levels of Coverage

Level of Coverage What They Say What I Think It Means(WHY don’t they just write it this way?)
Bronze A plan in the bronze level shall provide a level of coverage that is designed to provide benefits that are actuarially equivalent to 60 percent of the full actuarial value of the benefits provided under the plan. Your bronze plan gives you 60/40 coverage.
Silver A plan in the silver level shall provide a level of coverage that is designed to provide benefits that are actuarially equivalent to 70 percent of the full actuarial value of the benefits provided under the plan. Your silver plan gives you 70/30 coverage.
Gold A plan in the gold level shall provide a level of coverage that is designed to provide benefits that are actuarially equivalent to 80 percent of the full actuarial value of the benefits provided under the plan. Your gold plan gives you 80/20 coverage.
Platinum A plan in the platinum level shall provide a level of coverage that is designed to provide benefits that are actuarially equivalent to 90 percent of the full actuarial value of the benefits provided under the plan. Your platinum plan gives you 90/10 coverage.

 

So, basically, every state that manfully sucks up its frothing “states rights” outrage and signs on for the Affordable Care Act has to run the gamut from bronze to platinum coverage.

Why Have Levels?

I did a cursory search through the act to get a sense of why these definitions are needed. I think it is because states need to provide healthcare plans with different levels of coverage. If you choose to get less (bronze, 60/40 coverage), you pay less. This makes healthcare more affordable for poor people, gives them options to choose, and probably reduces the cost of coverage in general for the state because some people will choose the cheaper levels.

Health Savings Accounts Can Be Considered

The Secretary of Health and Human Services has the option of considering the money your employer pays into health savings accounts[2] when “determining the level of coverage for a plan of the employer.” Here’s what I *think* that means: If you choose to use a health savings account, whatever the company pays into that account for you will count toward the employer’s contribution for your health insurance. Now that’s cool. I didn’t even know employers COULD pay into your health savings account.

Healthcare.gov explains that a health savings account lets taxpayers squirrel away some pre-tax money to use for qualified medical expenses. Funds roll over each year if you don’t spend them (unlike a flexible spending account).

Meh, Just Come Close

There can be “allowable variance” in the bronze, silver, gold, and platinum plans’ coverage as long as the variations aren’t big[3]. For example, instead of the bronze plan offering 60/40 coverage in your state, it could be 58/42 or 62/38. Look for standards to develop on how big the variation can be. A quick search online tells me it may be about +/- 2%.

Catastrophic Plan

Section 1302 (e) seems to offer an alternative to the bronze, silver, gold, or platinum levels of coverage. It’s entitled “Catastrophic Plan.”  Here’s what I *think* it means:

A health plan that does NOT provide the bronze, silver, gold or platinum levels of coverage is still cool as one of the acceptable plans under the Affordable Care Act if it meets ALL of these conditions:

  • The only people who can enroll in it are under 30 or have an exemption based on poverty or other hardship[4], AND
  • People get the essential healthcare benefits[5] after they’ve paid their share of costs,[6] AND
  • There is coverage for at least three primary care visits, AND
  • It’s offered only in the “individual market.” (I guess this means catastrophic healthcare plans for individuals, not for families.)

Child-Only Plans

Section 1302 (f) just says that the whole bronze-silver-gold-platinum plan levels must also be offered as child-only plans (under age 21 at the beginning of a plan year).

Time to Flip Back to Earlier Pages

This concludes my look at Section 1302 of the Affordable Care Act. (One section down!) Next, I’ll go BACK to Section 2711 where I started. (Remember that? I was looking at it when the act started referring me hither and yon.)

Other Posts on ObamaCare:

  • Part 1: Intro
  • Part 2: Types of coverage, no discrimination
  • Part 3: Exchanges and what they do
  • Part 4: Your cost limits and adjustments
  • Part 5: Deductibles and preventive care
  • Part 7: Limits on losing coverage

Footnotes! We Have Footnotes!

See below for references to places in the Affordable Care Act that correlate to my summaries in this article.

[1] Source: Section 1302 (d)(1).

[2] That is, a health savings account per Section 223 of the Internal Revenue Code of 1986. Source: Section 1302 (d)(2)(B).

[3] Source: Section 1302 (d)(2)(C)(3).

[4] The person has to have a certification that he/she is exempt per section 5000A of the Internal Revenue Code of 1986 – specifically Section 5000A(e)(1) (relating to individuals without affordable coverage) or Section 5000A(e)(5) (relating to individuals with hardships). No way am I going to look up the details of an IRS requirement – you are on your own for that one, dudes!

[5] Because it’s really easy to get lost in jargon, I’m going to keep repeating the definition of “essential healthcare benefits” per this act, anytime I reference them in my posts:

  • Ambulatory (“walk in”) patient services
  • Emergency services
  • Hospitalization
  • Maternity/newborn care
  • Mental health and substance use disorder services (including behavioral health treatment)
  • Prescription drugs
  • Rehab and habilitative services/devices
  • Lab services
  • Preventive/wellness services and chronic disease management
  • Pediatric services (including oral and vision care)

[6] See Section 1302(c)(1)(A) and (B).

2 Comments

Filed under Healthcare, Politics

2 Responses to A Common Gal Looks at ObamaCare, Part 6: Four Levels of Coverage

  1. I’m glad for all you US people who are getting health care. I have to tell you though that it looks very complicated. I just take my health card to the doctor or to the massage therapist or the physiotherapist and get started on healing. Still, I know so many people in the States for whom the care is such a blessing, and I shouldn’t be flippant about it. I wouldn’t however, knowing myself as I do, have given it the scrutiny that you have.

  2. bob smith

    Actually I think by Individual plan it means not in a group plan My insurance is called an individual plan because I buy it myself, not as part of a group (like a group of employess that the company provides insurance for), and I can add my family to this individual plan.

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