The Four "Metal Plans" of Health Insurance Exchanges

Summary: What are metal plans? What distinguishes one from another? When do they go into effect?

Metal plans are the levels of plans that will be included in the health insurance exchanges. Health insurance exchanges are basically marketplaces designing for purchasing insurance. They are called metal plans because each level is a different metal: platinum, gold, silver, and bronze and were created as a result of the Affordable Care Act. The idea for the metal plans originated in Massachusetts.

Open enrollment for the exchanges begins October 1, 2013 and coverage will be effective January 1, 2014. While each metal plan offers the same essential benefits, they will vary based upon premiums and out of pocket expenses. Out of pocket expenses include deductibles, copayments and coinsurance.

All health plans in the exchanges are required to provide a minimum set of benefits which are termed essential benefits. These benefits include:

Ambulatory patient services
Emergency services
Hospitalization
Maternity and newborn care
Mental health services
Substance use disorder services
Prescription drug coverage
Rehabilitative and habilitative services and devices
Preventative and wellness services
Pediatric Services

Metal plans

Platinum

Lowest out of pocket for enrollees – approximately 10%
Highest premiums

Gold

Out of pocket expenses – approximately 20%
Must be offered by an insurance company in order to participate in the exchanges

Silver

Out of pocket expenses – approximately 30%
Must be offered by an insurance company in order to participate in the exchanges
The standard plan in terms of tax credit eligibility

Bronze

Highest out of pocket expenses – approximately 40%
Lowest premiums

Within each of the different levels, premiums will vary depending upon which company insurance is purchased through. This is where the term marketplace comes into play. Consumers will have to shop around to find the plan that will best suit their needs in terms of out of pocket expenses, premiums charged, and whether their doctors are part of the particular network. Additionally, for those that opt not to have health insurance, there will be penalties assessed. For 2014, the penalty will be the greater of $95 or 1% of adjusted annual household income. The penalties are expected to become steeper in later years.

Plans are beginning to release their premium schedules. They will vary from state to state. More detailed information will be released over the coming months so it will be important to remain current on the exchanges for your individual state.

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