Friday, December 6, 2013
Bronze Plan–What Is It?
Definition: A bronze health plan is a type of health insurance that pays, on average, 60 percent of your health care expenses. You pay the other 40 percent of your health care expenses in the form of copayments, coinsurance and deductibles.BackgroundTo make it easy to compare how much value you’re getting for the money you spend on health insurance premiums, the Affordable Care Act standardized value levels for health plans. These levels, or tiers, are bronze, silver, gold, and platinum. All of the health plans of a given level are expected to offer the same overall value. For bronze-tier plans, the value is 60 percent.What Does Value Mean With Respect to Health Insurance?Value, or actuarial value, tells you what percentage of covered health care expenses a plan is expected to pay for its membership as a whole. This doesn’t mean that you, personally, will have exactly 60 percent of your health care costs paid by your bronze plan. Depending on how you use your health insurance, you might have more or less than 60 percent of your expenses paid. It’s an average value spread across all of a plan’s members.Non-covered health care expenses aren’t taken into account when determining a health plan’s value. For example, if your bronze tier health plan doesn’t provide coverage for over-the-counter medicines like cold tablets or first-aid cream, the cost of those things isn’t included when calculating your plan’s value.What Will You Have to Pay With a Bronze Plan?You’ll have to pay monthly premiums for the health plan. You’ll also have to pay cost sharing like deductibles, coinsurance and copays when you use your health insurance. Bronze plan monthly premiums tend to be cheaper than higher value plans because bronze plans expect to pay less money toward your health care bills. You get what you pay forHow each plan makes you pay your share of your health care expenses will vary. For example, one bronze plan might have a high $3000 deductible paired with a low 15 percent coinsurance. A competing bronze plan might have a lower $900 deductible paired with a high 35 percent coinsurance and a $25 copay for prescriptions.Why Should I Choose a Bronze Plan?In choosing a health plan, if the most important factor to you is a low monthly premium, a bronze-tier health plan can be a good choice. If you don’t expect to use your health insurance much, or the high cost sharing inherent in a bronze plan doesn’t concern you, a bronze health plan might fit the bill.You might find that a catastrophic plan offers an even lower monthly premium, although with a correspondingly lower actuarial value. If you’re over 30 years old, though, you won’t be able to buy a catastrophic plan on a health insurance exchange unless you have a health insurance exemption certificate.Why Shouldn't I Choose a Bronze Pan?Don’t choose a bronze-tier health plan if you want a plan that pays for most of your health care expenses. If you expect to use your health insurance a lot, or you can’t afford high copays, coinsurance, and deductibles, a bronze plan might not be for you.If you’re eligible for cost-sharing subsidies because your income is 250 percent of federal poverty level or lower, you’re only eligible for the cost-sharing subsidies if you choose a silver-tier plan. You won’t get the cost-sharing subsidies you qualify for if you choose a bronze plan.Cost-sharing subsidies make your deductible, copays, and coinsurance lower so you pay less when you use your health insurance. In effect, a cost-sharing subsidy will increase the value of your health plan without raising the monthly premiums. It’s like getting a free upgrade on value. You won’t get the free upgrade if you choose a bronze plan.