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A Primer on Coverage Levels in Health Insurance Marketplaces



This week in Washington—different levels of coverage will be offered through the health insurance marketplaces. You are tuning in to the health policy update from America’s Essential Hospitals for the week of August 5.

So far in our exchange series we have discussed benefits that health insurance plans must cover in order to be sold through the exchange, or marketplace. Today we will take a closer look at the different levels of coverage that health insurance plans may offer to cover those benefits.

As we discussed last week, the Affordable Care Act (ACA) requires that health insurance plans sold through the exchanges must cover at least 10 categories of benefits, referred to as the essential health benefits. Plans sold through the exchanges must also cover the exact services each state requires within these categories of care.

Although the ACA requires that each plan cover the same categories of benefits, it allows health insurance issuers to offer plans that cover these benefits at different levels. The levels correspond with the percentage of benefits the plan will pay for and the percentage of benefits the consumer will be required to pay for. The ACA defines four levels: bronze, silver, gold, and platinum.

Bronze-level plans offer the least comprehensive coverage. The plan will pay for 60 percent of the benefits provided under the plan and leave consumers responsible for 40 percent of costs. Bronze plans have the lowest actuarial value in the exchange, as they cover the smallest percentage of health care costs.

Silver-level plans pay for 70 percent of the benefits provided under the plan and require consumers to pay for 30 percent of costs. Gold-level plans pay for 80 percent and require consumers to cover 20 percent of costs.

Platinum-level plans have the highest actuarial value in the exchange. They cover 90 percent of costs, and leave consumers responsible for 10 percent of the benefits provided under the plan.

Health insurance issuers must offer at least one plan at the silver level and one plan at the gold level through each exchange. Issuers may also offer plans at the bronze and platinum levels, in addition to the required levels.

So what does that mean for essential hospitals? With access to purchase plans at different coverage levels, some people will enroll in plans with more cost-sharing responsibilities than they can afford. This will leave hospitals with unpaid costs for services provided.

For example, people who choose to enroll in the bronze level plan, which has the highest out-of-pocket costs, will most likely be those with the lowest incomes. As a result, these patients may not be able to pay the difference they are responsible for when they receive health care services.

It is important to essential hospitals that health insurance plans are affordable for people with low-incomes, but also account for this scenario. This will enable hospitals to focus on providing care to low-income patients without the strain of unpaid cost-sharing. America’s Essential Hospitals will continue to work with the administration and our members on this issue as the marketplaces are created.

Thanks for listening to another edition of This Week in Washington. I’m Erin Richardson; join us next week as we continue our discussion of health insurance exchanges.


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