Private Insurance Plans under the Affordable Care Act
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Shopping for a private insurance plan —one an insurance company offers (instead of the government) — should be more straightforward under the Affordable Care Act (ACA) than in the past, for a couple key reasons:
All plans sold in the Marketplace are required to offer the same set of essential health insurance benefits. These benefits include doctor visits, emergency services, lab services, hospital stays, preventive services, prescription drugs, mental healthcare, newborn and pediatric care, and more.
Before a plan is offered on the Marketplace, it goes through a vetting process to make sure it adheres to the ACA’s requirements for benefits, costs, and so on.
All Marketplace plans must provide a Summary of Benefits and Coverage (SBC) using a standardized form that the ACA requires. The SBCs allow you to make side-by-side comparisons of different plans’ benefits and prices. An SBC must explain what’s included in a plan in simple language, to eliminate confusion and guesswork about what’s covered.
Given that all plans on the Marketplace must at least offer the same essential health benefits, can you expect that all the plans offered in your state will cost about the same amount? No. Here are the key reasons for cost differences among plans:
Various cost structures are available. You can choose from four levels of coverage: bronze, silver, gold, and platinum. (You also may be able to purchase a catastrophic plan.) Each plan has different premium costs and out-of-pocket costs (including deductibles and copays).
The bronze plans have the least expensive premiums but the highest out-of-pocket percentages. A platinum plan is at the other end of the spectrum, offering the lowest percentage of out-of-pocket expenses in exchange for the highest premiums.
You can select among plans that offer broader or narrower access to healthcare providers. For example, you may buy into a Health Maintenance Organization (HMO), which operates in a local area and may provide coverage only if you go to the doctors and hospitals within the plan’s provider network.
Or you could select a Preferred Provider Organization (PPO) plan that has a provider network but also covers you if you go to doctors and hospitals outside the network. Broader access to providers (as with a PPO) costs more than restricted access to providers (as with an HMO).
Coverage still differs among plans. Even though you’re guaranteed that a Marketplace plan will cover the essential health benefits as identified by the ACA, not all plans cover them the same way or cover the same items beyond those essentials.
If you have a history of requiring certain types of care based on a chronic condition, be sure to study each plan (and ask questions of a Marketplace customer service representative or navigator) to determine whether a given plan covers your specific healthcare needs.
Some state Marketplaces are more robust than others. If you live in an area with a large population, chances are good that multiple private plans may work for you, and you need to spend some time doing apples-to-apples comparisons (which the SBCs make easy) to figure out your best option.
In other areas, you may find that only one or two plans fit your needs, so your shopping experience may mostly involve determining what to expect from the coverage being offered.
Either way, don’t expect that you’ll hop on your state’s Marketplace website and spend 5 minutes exploring your options and enrolling. You’re making a major purchase, and you need to devote some time to understanding what you’re getting and what you’ll pay.
You should set aside an hour at the minimum to look at plans, compare your options, and enroll. The more time you spend up front making a decision, the better that decision is likely to be.