Healthcare insurance has changed drastically over the past few years, especially in light of Obamacare (Affordable Care Act). This has certainly created even more confusion for families when it comes to understanding the different types of coverage and plans that are available. Whether a recently married couple or family, it is important to know what your options are to ensure you select the plan that provides the right coverage.
There are several different types of healthcare plans available to individuals and families and within the plans are different tiers. To begin to select the right type of coverage, it is important to understand three fundamental structure…types of plan, metal tiers, coverage tiers.
When it comes to the types of healthcare plans, there are many. The following, though, is an overview of the four most commonly used plans:
- Exclusive Provider Organization (EPO) which is a managed care plan where services are covered only if you use doctors, specialists, or hospitals in the plan’s network (however this is not applicable in case of an emergency).
- Health Maintenance Organization (HMO) which is a health insurance plan. This plan restricts coverage of care from doctors who work for or contract with the HMO. These usually won’t cover out-of-network care except in emergencies.
- Point of Service (POS) is a plan where cost incurred is much less if you use doctors, hospitals, and other health care providers that belong to the plan’s network. In order to see specialists, these plans require a referral from a primary care doctor.
- Preferred Provider Organization (POS) is a health plan where you pay less provided you use providers in the plan’s network. Unlike an HMO, at an additional cost, you can use the service of doctors, hospitals, and providers outside of the network without a referral.
Since individuals and families need different types of health insurance plans to meet their needs, under each of the types of plans are metal tiers, each one being associated with a level of benefits and costs. The tiers include Bronze, Silver, Gold and Platinum. In essence, as the metal tier increases in value, so does the percent of medical expenses that the plan will cover. These percentages are known as the actuarial value.
The following is an overview of the variances between the four tiers:
1. Bronze plans require the insured to pay 40% of the expected medical expenses via coinsurance, deductibles and copayments.
2. Silver plans require the insured to pay 30% of the expected medical expenses via coinsurance, deductibles and copayments.
3. Gold plans require the insured to pay 20% of the expected medical expenses via coinsurance, deductibles and copayments.
4. Platinum plans require the insured to pay 10% of the expected medical expenses via coinsurance, deductibles and copayments.
Finally, once you have selected the type of plan and the metal tier, you will have to select the coverage that you are seeking. In other words, is it just for you, for you and your spouse, or your family.
The following are common coverage tiers associated with healthcare plans through the Marketplace or an employer:
1. Individual or Employee Only (this is used to cover one person)
2. Individual + Spouse or Employee + Spouse (this is used to cover a married couple or in some situations, domestic partnerships)
3. Individual + Child(ren) or Employee + Child(ren) (this is often used for single parents or married parents when one spouse is on their own plan and the other spouse covers the eligible dependent children under 26 years of age on their plan)
4. Family (this is used when covering both parents and eligible dependents under 26 years of age)
Here are some examples of what a healthcare insurance plan structure may look like:
- PPO, Silver, Family
- HMO, Platinum, Individual + Spouse
- EPO, Gold, Individual + Children