With all the impending changes from the Affordable Care Act, you may be wondering “How will I choose my health care plan?”
To help make shopping for health insurance easier, health plans on a public exchange or Marketplace will be labeled platinum, gold, silver, or bronze. The metallic level is intended to help shoppers understand the level of coverage a plan offers; it will indicate how much they will need to pay and what the plan pays.
How Will These Plans Compare in Terms of Price?
The Platinum plans will have the lowest out of pocket cost for members but the monthly premiums will generally be higher.
Bronze plans, on the other hand, will have the highest out of pocket costs for members, but will typically feature lower monthly premiums.
What Will Be Included?
All plans on an exchange have to offer some core benefits, called “essential health benefits,” like:
- preventive and wellness services
- prescription drugs
- and coverage for hospital stays.
Public Exchanges vs. Private Exchanges
Public exchanges, the ones offered by either the state or federal government, are designed to help shoppers choose a plan that fits their needs and their budget.
There are also private exchanges. Private exchanges are not part of the Affordable Care Act. They are created by private sector companies. For example, a health insurance company or a brokerage or consulting firm would be considered a private exchange. Although only a few private exchanges exist today, they are becoming increasingly popular.
Like public exchanges, private exchanges can sell to both individuals and employer groups. Unlike public exchanges, private exchanges are already open for business.
For employers who are trying to keep the cost of offering health benefits manageable, private exchanges offer an interesting solution. Employers can give their employees a set amount of money and then direct them to a private exchange. There, they can shop for a health plan and other benefits, such as dental benefits, based on what the employer has selected as viable options.
Public and private exchanges are likely to appeal to different audiences. Individuals who do not have access to affordable health insurance today are more likely to shop on a public exchange due to the subsidies available. Those subsidies are not available through private exchanges. However, both individuals and small employers will still be able to shop for coverage directly from health insurers, just as they do today. Because of this, employers are more likely to send their employees to a private exchange.
To highlight a few key messages about exchanges or Marketplaces:
- Exchanges give people additional access and more opportunity to buy insurance.
- A public exchange may be run by the state or federal government, or by the state and federal government working together.
- Every state will have a public exchange available to its residents.
- Subsidies and tax credits will help make insurance affordable for many individuals who shop on the public exchanges.
- Small group employers can buy and offer insurance through an exchange, as well.
- Private exchanges are not run by the government but by a private sector company, like a health plan or a consulting firm.
- These exist today, but they will become more popular as employers look for new ways to offer affordable benefits to their employees.
One thing is certain: Marketplaces or Exchanges are going to change the way millions of Americans view their health insurance – whether it’s how they shop for a plan, what plan they decide to buy or how they use their benefits.