THE AFFORDABLE CARE ACT and STANDARDIZATION of BENEFITS

superdave

Expert
54
Florida
THE AFFORDABLE CARE ACT and STANDARDIZATION of BENEFITS

In an attempt to help consumers compare health plans based on different benefits and out of pocket costs the Affordable Care Act (ACA) has created a Standardization Model for health insurance plans sold through the exchange marketplaces.
Beginning in 2014, private health insurers will need to meet new requirements for standardizing health insurance plans. Standardization will help individuals and businesses make better-informed comparisons between different insurance plan options and also help guard against insurance company efforts to cherry pick the healthiest people.
Under the ACA, insurers will be required to offer plans that fit within four levels of coverage: bronze, silver, gold and platinum.
Each plan level must cover the same set of minimum essential health benefits (see my earlier email). But while the scope of benefits will be the same among the plans, the value of those benefits will vary across the bronze, silver, gold and platinum levels. This means the amount of cost-sharing required will differ in those tiers.
A simple view of these plans indicate that bronze plans will have the least generous coverage with more out-of-pocket costs for enrollees, and platinum plans will have the most generous benefits. As an example:
• Bronze - Consumers pay 40% and Plan Pays 60%
• Silver – Consumers pay 30% and Plan pays 70%
• Gold – Consumer pays 20% and Plan pays 80%
• Platinum – Consumer pays 10% and Plan pays 90%
But Coach Lombardi knows that simple plays are too easy to defense. So we need to add a little more complexity. That complexity factor is called Actuarial Value.
Actuarial value is the percentage of health care costs covered by an insurance company for the average enrollee. For example, if a Silver plan has an actuarial value of 70 percent, on average, a Silver plan member would be responsible for 30 percent of the costs of all covered benefits.
Actuarial value is different from the premium for the health plan. Premiums for different plans at the same level will vary from one insurer to another, based on the overall use of services by enrollees, the prices of health care services negotiated by the insurer, and how the plan controls the services its enrollees use.
While all Silver Plans will have an Actuarial Value of 70% each Silver Plan can have their own set of deductibles, copayments and coinsurance for which the member is responsible. These benefit designs, in addition to different premiums, create options for the consumer within each plan level.
“Wait Coach, I thought you said that a major benefit of the Affordable Care Act was to standardize benefits and make it easier for consumers to compare plans?”
Coach Lombardi realizes that his Wide Receiver Max McGee seems confused. So he will call an end to this session and address Premium Limits; Maximum Out of Pocket Expense Limits and Subsidies another day.
 
THE AFFORDABLE CARE ACT and STANDARDIZATION of BENEFITS

In an attempt to help consumers compare health plans based on different benefits and out of pocket costs the Affordable Care Act (ACA) has created a Standardization Model for health insurance plans sold through the exchange marketplaces.
Beginning in 2014, private health insurers will need to meet new requirements for standardizing health insurance plans. Standardization will help individuals and businesses make better-informed comparisons between different insurance plan options and also help guard against insurance company efforts to cherry pick the healthiest people.
Under the ACA, insurers will be required to offer plans that fit within four levels of coverage: bronze, silver, gold and platinum.
Each plan level must cover the same set of minimum essential health benefits (see my earlier email). But while the scope of benefits will be the same among the plans, the value of those benefits will vary across the bronze, silver, gold and platinum levels. This means the amount of cost-sharing required will differ in those tiers.
A simple view of these plans indicate that bronze plans will have the least generous coverage with more out-of-pocket costs for enrollees, and platinum plans will have the most generous benefits. As an example:
• Bronze - Consumers pay 40% and Plan Pays 60%
• Silver – Consumers pay 30% and Plan pays 70%
• Gold – Consumer pays 20% and Plan pays 80%
• Platinum – Consumer pays 10% and Plan pays 90%
But Coach Lombardi knows that simple plays are too easy to defense. So we need to add a little more complexity. That complexity factor is called Actuarial Value.
Actuarial value is the percentage of health care costs covered by an insurance company for the average enrollee. For example, if a Silver plan has an actuarial value of 70 percent, on average, a Silver plan member would be responsible for 30 percent of the costs of all covered benefits.
Actuarial value is different from the premium for the health plan. Premiums for different plans at the same level will vary from one insurer to another, based on the overall use of services by enrollees, the prices of health care services negotiated by the insurer, and how the plan controls the services its enrollees use.
While all Silver Plans will have an Actuarial Value of 70% each Silver Plan can have their own set of deductibles, copayments and coinsurance for which the member is responsible. These benefit designs, in addition to different premiums, create options for the consumer within each plan level.
“Wait Coach, I thought you said that a major benefit of the Affordable Care Act was to standardize benefits and make it easier for consumers to compare plans?”
Coach Lombardi realizes that his Wide Receiver Max McGee seems confused. So he will call an end to this session and address Premium Limits; Maximum Out of Pocket Expense Limits and Subsidies another day.

Am I the only one confused here?:err:
 
SuperDave, educate coach VINCE about the Catastrophic plan. Most of his players are under age 30 and the higher out-of-pocket cost for medical care wouldn't be a problem for them. It might even be better than their N.F. league insurance plan.
 

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