How to Sign Up For Obamacare: What Kind of Plan Should You Choose?
A cousin of mine in Northern California, who's in his late 20s, had the hardest time for years getting quality health insurance. He has asthma, allergies and other pre-existing conditions.
Rejections came left and right. No. No. NO. He was able to maintain a plan through COBRA, but at a staggering $626 monthly premium.
Times, as of October 1, have changed. Open enrollment for individual and family plans going into effect January 2014 under the federal Patient Protection and Affordable Care Act, known as Obamacare, has begun.
It’s a world where a 29-year-old single man or woman without health insurance can log onto a federal or state run marketplace website, plunk down his or her info—age, income, location, smoking status (not in California)—and snag a healthcare plan, regardless of pre-existing conditions. It’s a world where if that person makes below a certain income—less than $28,725, according to Calfornia’s exchange Covered California—he or she can qualify for premium assistance, with the government paying part of monthly costs.
It's a world where my cousin logged on and found a plan for half the cost of what he had been paying. His copays will go from $30 to $3.
“Not having to stress about this stuff improves my quality of life,” he says.
So which ACA qualified plans are best for younger people? Which plans benefit older folks with higher health risk? It all can seem, on the surface, utterly confusing.
Obamacare plans fit into four tiered categories: Bronze and Silver (which have low monthly premiums, higher deductibles), and Gold and Platinum (which have higher monthly premiums, no deductibles).
Platinum level plans cover the most, 90 percent of healthcare costs, with the insured covering 10 percent, and Bronze plans cover the least, 60 percent, with the insured paying 40 percent.
“Most people under the age of 30 would opt into a Bronze or Silver plan,” says Dylan Roby, an assistant professor at the UCLA School of Public Health and a research scientist with the UCLA Center for Health Policy Research. “It depends on affordability and perceived risk. Generally people tend to only worry about health when it’s in their self-interest when they’re younger. When they’re older, they feel like they’re in the same pool.”
The Bronze plan, out of the four tiers, has the highest medical and drug deductible, a steep $5,000, which is the amount that must be paid out of pocket by the insured before an insurer will pay any expenses. But the tier’s monthly premium fee, varying according to insurer, is the lowest.
For instance, a 27-year-old single person living in downtown Los Angeles, who makes $20,000, would have a $161 premium under the Bronze level L.A. Care Health Plan, and qualify for $129 in premium assistance tax credits a month. That means a total monthly payment would be just $32.
A Silver tier plan for the same person would have a $500 medical deductible, but with a higher premium still lowered by tax credits.
Gold and Platinum level plans have zero—yes, ZERO—deductibles. That makes them choice plans for older Americans, especially with chronic conditions, willing to pay higher premiums for more coverage. Next door to that 27-year-old in downtown L.A. could be a 55-year-old making $30,000, and he or she would still qualify for hefty tax credits under Gold and Platinum plans. A Molina Healthcare Gold plan would come to $498 per month, but with $247 in premium assistance, would only be $250 total monthly.
“If you’re getting a fairly good tax credit subsidy, and you’re older, then the higher plans are more generous,” says Roby. “If you’re 55, you may own a house, and be retired, and have more to lose. Those people are more likely to upgrade their coverage since they have a more perceived risk of actually spending on healthcare.”