ACA Basics
Laying a Solid Foundation | Lesson 3

ACA Plan Structure

The ACA established 10 different essential health benefit categories that must be covered within its plans. These include categories like maternity care, preventative care, prescriptions, and hospitalization.

ACA plans must cover various items and services from these 10 categories, but specifics on that coverage can vary by state and by the plan.

Although these essential services are covered, beneficiaries may still face cost-sharing for them in the form of deductibles, copays, and coinsurances. Individuals will also pay a monthly premium for their ACA plans.

Additionally, marketplace plans work with a network of providers. When it comes to networks, certain plans like HMOs require beneficiaries to receive non-emergency care from in-network providers only, while other plans, like PPOs, have more flexibility for accessing care.

As we talk about plans, it’s important for us to mention one that isn’t as well known, the exclusive provider organization or EPO. An EPO is like an HMO, as it only covers non-emergency services from in-network providers. However, it also differs a bit.

EPOs don’t always require the beneficiary to select a primary care provider, and they don’t require a referral to see a specialist.

The last part of plan structure we want to cover; the five different ACA plan categories. These include the four metal levels, bronze, silver, gold, and platinum, as well as catastrophic plans.

The four metal levels are distinguished by actuarial value, AV for short, which essentially just summarizes the average portion of costs covered by the plan.

Let’s explore this concept by looking at the highest level of coverage: the platinum plan.

Platinum plans have a 90 percent AV, which means that the plan will cover about 90 percent of the costs and the beneficiary would cover the other 10 percent. This type of plan often has the highest premiums, but in turn will have the lowest deductibles and out-of-pocket costs.

Gold plans have an 80 percent AV, so the beneficiary would handle about 20 percent of the costs. These plans usually offer cheaper premiums than platinum plans, but also have slightly higher out-of-pocket costs.

Up next, the silver plan. Although we’re moving down in coverage, silver plans are the most prevalent plans in the ACA marketplace. One reason for their popularity is that qualified beneficiaries can receive cost sharing reductions that are only applied to silver plans. This allows qualified individuals to save on their out-of-pocket expenses in a silver plan. And we’ll talk about reductions and subsidies more in the next lesson.

For now, let’s talk about the coverage in a silver plan. They have a 70 percent AV and typically offer modest premiums and modest out-of-pocket expenses.

Our final metal level is bronze. As you may have guessed, these plans have a 60 percent AV, so the plan covers about 60 percent of the costs and the beneficiary covers the other 40 percent. These plans will often have the lowest premium among the metal levels and have higher out-of-pocket costs.

The last ACA plan type we need to talk about is the catastrophic plan. These plans don’t have a set actuarial value like the metal tiers and offer limited coverage often at a lower premium amount. The other thing to note about catastrophic plans is they are limited to those who are under age 30 or those who are age 30 and older with a hardship or affordability exception.

That should give you a good overview of the ACA plan types.

Just remember that premiums and out-of-pocket costs can change based on your location and if your client qualifies for any ACA subsidies. Speaking of subsidies, those are the focus of our next lesson.

We’ll see you there!

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