Government-approved health insurance plans are organized into various tiers that dictate cost and the level of coverage offered. The Health Insurance Marketplace offers bronze, silver, gold and catastrophic plans for both individuals and families. The plan that you should select depends on what your coverage needs are and how much you can afford to pay for the plan.
Catastrophic health plans are at the bottom of the tier and only available to individuals under age 30 or who are unable to find a plan that is less than 8% of their gross income. They have the lowest premium, but also the lowest level of coverage. The deductible is $6,850, which requires you to pay out of pocket for most of your medical costs. This plan protects from events where you become injured or severely ill.
Bronze plans offer the second lowest monthly premium, but your deductible will be $6,600 for individuals and $13,200 for families. You’ll be responsible for the majority of your routine medical costs, but have coverage for serious injuries or illnesses with expensive medical bills. You’re responsible for 40% of your medical expenses, while the insurance company picks up the other 60% for routine expenses. It’s a base level plan that offers essential health benefits and no-cost preventative services.
Silver plans are the next step up and have a moderate premium and moderate costs for healthcare, but no deductible. The insurance company picks up 70% of the bill, and you’ll be responsible for the other 30%. If you want to benefit from cost-sharing services, you’ll need to select a silver plan. Cost-sharing subsidies reduce your out-of-pocket costs from the standard 30% to as low as 6%. Plans in this tier cover slightly more of your routine medical care.
These plans have higher monthly costs but have no deductible. It picks up 80% of your medical costs and leaves you responsible for only 20%. These plans provide a higher level of coverage with more flexibility than the lower tiers.
Keep in mind that your costs can be reduced by government subsidies depending on your income level. You’ll see if you qualify when you apply for an insurance plan through the marketplace. The amount of the subsidy depends on age, size of the household and state you live in.
Purchasing insurance doesn’t need to be confusing. Analyze your needs in a plan and take the application process step-by-step as you learn the costs and benefits of each plan.