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Understand Cost

Recognize What Impacts Premiums

If you currently get your insurance through an employer with 51 or more employees, you won’t likely notice much difference, if any, due to ACA.

If you buy your own insurance and you bought the plan you have today before March 23, 2010, and have not made any changes, you aren’t required to buy a new plan (with a few execptions, such as temporary plans). If that’s the case for you, you will only experience the normal yearly increases of rising health care costs.

For nearly everyone else, what you end up paying for a new ACA health insurance plan depends on:

  • what you’re paying now
  • how many family members will be on your plan, and their ages
  • how much you use the health care system, and
  • whether or not you qualify for federal financial help.
  • new ACA rules

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ACA Overview

Everyone—with very few exceptions—is now required to buy insurance. What’s more, the ACA guarantees that no one can be denied coverage or be charged more because they’re sick or because they have a pre-existing medical condition.

Guaranteeing every person health insurance coverage will only work if everyone is required to buy insurance.

Many experts think the cost of health insurance will rise because guaranteeing that anyone can buy insurance will attract more sick and unhealthy people into the pool of insured people. These are the people who need the coverage most. From society’s point of view, this is a good thing because these sicker people can’t be denied coverage. But insurance premiums are based on the entire population pool’s costs for using health care services. As sick and unhealthy people use more services, they drive up the pool’s costs—and premiums will rise with them.

To balance out these higher costs, younger, healthier people need to be added to the pool of insured people. But they often don’t think they need health insurance. To get them into the pool of insured people, the law requires them to buy a plan that covers enough to be considered a qualified plan. The ones who don’t will be penalized with a new tax.

If more sick people join the insured pool than healthy ones, premiums and costs will go up. But there’s just no way to tell how much until after the ACA takes effect on January 1, 2014.

Essential Health Benefits & Preventive Services

The law requires that each state’s plans cover these same core Essential Health Benefits:

  • Ambulatory patient services
  • Maternity & newborn care
  • Prescription drugs
  • Laboratory services
  • Preventive/wellness care
  • Pediatric dental & vision care
  • Emergency services
  • Hospitalization
  • Mental health/substance abuse services
  • Rehabilitative/habilitative services & devices

All plans also must offer preventive services at no charge. You won’t pay a copay or co-insurance for these services, and you won’t have to meet your deductible before you use these no-charge services including:

  • Adult physicals and blood pressure/cholesterol screenings
  • Well-child care visits and immunizations
  • OB/GYN visits
  • X-rays and diagnostic/lab tests
  • Cancer screenings such as mammograms, pap tests, prostate and colorectal screenings
  • Routine pre-natal maternity visits
Metal Level

Under the ACA plans (except high-deductible Catastrophic plans) must also fit into one of four-Metal Levels. Bronze, Silver, Gold & Platinum. These plans cover the same core benefits, but plans at each level have different monthly premiums and varying out-of-pocket costs. Also for people who qualify, the ACA has created subsidies to help cover the cost of plans.

Different Plans have different monthly premiums and out-of-pocket costs for you.

Metal Level
What the Health Plan Pays
What You Pay
Platinum 90% 10%
Gold 80% 20%
Silver 70% 30%
Bronze 60% 40%
Your monthly premium rate is a separate cost and is not included in these calculations.

Insurance companies used to have a nearly infinite number of combinations of premiums and how much of your heathcare costs you would pay. Being forced to fit into specifically defined Metal Levels means less flexibility when it comes to pricing. You’re likely to end up paying a higher premium to keep your out-of-pocket costs down, or you’ll end up paying more when you receive care in exchange for a lower monthly premium.

Subsidy

In addition to requiring younger, healthier people to buy insurance to offset people who use more health care, ACA created two types of financial assistance—called Subsidies—for low- and middle-income people.

  • The Premium Subsidy will help your monthly premiums if your total household income in 2012 was:
    • Less than $45,960 for an Individual
    • Less than $62,040 for a Family of 2
    • Less than $78,120 for a Family of 3
    • Less than $94,200 for a Family of 4
    • Less than $110,280 for a Family of 5
  • The Cost-Sharing Subsidy can help limit how much you’ll have to pay out-of-pocket for your health care. It can only be applied to Silver plans purchased on the public Exchange. You may be eligible if your total household income in 2012 was:
    • Less than $28,725 for an Individual
    • Less than $38,775 for a Family of 2
    • Less than $48,825 for a Family of 3
    • Less than $58,875 for a Family of 4
    • Less than $68,925 for a Family of 5

You’ll have to apply for Subsidies on the public State Exchange. You also must buy the plan you want the Subsidy for on that State Exchange.

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