Affordable Care Act / Obamacare
Signed into law in 2010, all ACA compliant insurance plans must meet strict criteria to be considered “Minimum Essential Coverage” as defined by the ACA.
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Services Required for Minimum Essential Coverage According to ACA
- Ambulatory Patient Services (outpatient care)
- Emergency Services (ER)
- Hospitalizations
- Pregnancy, Maternity & Postnatal care
- Mental Health & Substance Abuse care
- Prescription Drugs
- Rehabilitative Services and Equipment
- Lab Services
- Preventative & Wellness Services
- Pediatric Services
The 3 Phases of An ACA Plan
1) Meet Deductible
Every policy has a deductible, which is the amount which you must pay out of pocket before the plan begins to pay out.
2) Pay Coinsurance
After meeting your deductible, your coinsurance is the percentage of your medical bills which you’ll be responsible for.
3) Pay Nothing after OOPM
Your out-of-pocket-max (OOPM) tells you the maximum per year that you’ll pay, after which the policy pays 100% of medical services.
For Example
An Example Gold Plan
Deductible of $2,500 (Amount you must pay before services are covered).
Coinsurance of 25% – You would pay 25% of medical costs after paying the first $2,500 out of pocket.
Out-of-pocket-maximum is $8,000. After paying your deductible plus an additional $5,500 out of pocket, the plan will pay 100% of all medical costs for the remainder of the year.
The Deductible and Out-of-pocket-max will reset on Jan 1 of each year.
Ok but what’s the cost?
The out-of-pocket-max of an ACA plan is a great security. The problem for many people is getting the deductible and premiums (monthly payments) both in a comfortable range. For a 43 year old male in Florida, the Gold Plan above would cost $565.75 per month. This price is obviously multiplied if you are also insuring a spouse and children.
The monthly price of this plan increases to over $700 when the deductible is lowered under $1,000. Many families in Florida would pay between $2,000 – 3,000 a month for a similar plan.
Individuals who expect to earn less than $58,320 will often qualify for a Marketplace Subsidy, meaning they will get a discounted rate on account of their income. Someone who qualifies for a $400 subsidy will have the freedom to use that money on any plan they want and receive a $400 per month discount. This income threshold increases per member added; a household of 2 could earn up to $78,880 and a family of 5 could earn up to $140,560 and still qualify for a Marketplace Subsidy. ACA Insurance Policies are often the best option for people who qualify for a subsidy, since they can enjoy the out-of-pocket-max for a lower cost per month. Often people will add a separate policy to help cover the deductible.
Are ACA / Obamacare Plans Right for Me?
There are other types of insurance which can be purchased alongside or in some cases instead of ACA Insurance. While these plans are attractive for their lower price point, there are circumstances where an ACA plan is best.
Pre-Existing Condition
Private health insurance plans usually do not cover pre-existing conditions for at least the first 12 months of the policy.
Poor Health History
Most private health insurance companies ask health questions which must be answered “no” in order to be approved. Those with a history of major health issues have a harder time qualifying for private health insurance.
Current Pregnancy
ACA Insurance is great for its rich maternity coverage. Some private plans cover pregnancy, but those currently expecting are limited to ACA.
