The Free Press, Mankato, MN

State, national news

September 5, 2013

Health law coverage may track workplace cost shift

Health plans may have attractive premiums but higher out-of-pocket costs

(Continued)

Under Obama's law, all plans on the new insurance markets must cover the same benefits, including preventive care at no charge to patients. Another similarity is a cap on total out-of-pocket costs at $6,350 for individuals, $12,700 for a family policy.

The main difference between plans is cost-sharing. Bronze plans cover 60 percent of expected medical costs; silver plans will cover 70 percent; gold will cover 80 percent, and platinum 90 percent.

Mid-range silver plans were considered the benchmark when the law was written more than three years ago. Lawmakers keyed the tax credits to the cost of the second-lowest-cost silver plan in a local area.

People with modest incomes may still come out ahead by sticking with a silver plan instead of going for bronze. That's because additional help with out-of-pocket costs such as copays will only be available to people enrolling in a silver plan.

The tax credits work by limiting what you pay for premiums to a given percentage of your income.

For example, someone making $23,000 would pay no more than 6.3 percent of his or her annual income — $1,450 — for a benchmark silver plan. The amount you pay stays the same whether the total premium is $3,000 or $9,000.

But those tax credits taper off rapidly for people with solid middle-class incomes, above $30,000 for an individual and $60,000 for a family of four.

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