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The Importance of the Silver Plan
The new color of health subsidies for insurance in the Health Exchange is clearly going to be Silver. As we get closer to the roll-out of the new plans and most importantly to us, the potential health subsidies, the U.S. public will be come well acquainted with the Silver plan so let's take a look at why it is so important.
Health plans are going Metallic
The original bill established 4 essential health plans that would be available to the individual, family, and group market after Jan 1st 2014. These plans will have different levels of benefits and different monthly premiums. Starting from less rich to more rich in benefits and cost, they are the Bronze, Silver, Gold, and Platinum. There will also be a catastrophic plan for individuals under age 30. The metallic plans are designed to hit certain levels of coverage. For example, a person with Platinum plan can expect the plan to pay approximately 90% of health related costs that arise. Keep in mind that this is an average and some people have significant health care costs while others might never see a doctor. The Gold is designed to absorb 80% of the potential health care costs. Silver is slotted for 70% and the Bronze is designed for 60% of the health care costs. We're starting to see what this actually translates out to in benefits since California has already released the essential plan benefits. The Platinum and Gold are very rich in benefits with small if any deductibles and low coinsurance and copays. The Bronze is anticipated to have a higher deductible of between $3-4K on average. The Silver will probably have smaller deductible (by today's standards) of around $1500 and this is the plan that we're most interested in when considering health subsidies.
Silver is the designated plan for cost sharing benefits
The law went further to stipulate that only the Silver level of benefits would be eligible for the cost sharing benefits assuming that you meet the other requirements which are primarily based on income levels as compared to the Federal Poverty Level. This means that if you are eligible based on income but choose the Gold, Platinum, or Bronze plan, you will not be able to get the cost sharing benefit. Essentially, there will be no reason to choose any plan outside of the Silver if you qualify for and want to get the cost sharing. The Cost Sharing benefit essentially gives you much richer benefits on a sliding scale up to 250% of the Federal POverty PLevel. . So Silver it is!
Affordability drives the Silver selection
The thinking goes like this. If you qualify for a health subsidy, income is already tight. You probably can't truly afford the Platinum or Silver plan even with the subsidy. Conversely, you probably can't afford the out of pocket that might occur on the less rich Bronze plan. They chose a middle ground option which is the Silver plan.
Los Angeles, Family of 4
making $60K. Subsidy=$8,388*
Iowa, Single Adult making $30K
*Based on age, expected costs, and other assumptions according to Kaiser Calculator. Actual subsidies will vary and official subsidy amounts will be available Oct 1st, 2013.
Health Subsidy Calculator
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