Right now, it’s a great time to save money on health insurance by purchasing an Obamacare health plan, so how much does Obamacare cost? It’s a common question we hear from those who’ve never purchased insurance.
Still, you have to know what you’re getting into before heading to the federal health insurance marketplace, HealthCare.gov. That’s where you can sign-up for Obamacare subsidies and select an approved policy. Overall, the process is pretty straightforward since all you need is your basic demographic details and your adjusted gross income from the last year you filed taxes.
Once you provide that information, you’ll see health insurance separated by four different “metal tiers,” so what’s the bottom line to save as much as possible?
Per metal-tier, how much does Obamacare cost?
If you’re confused about Obamacare costs, you’re definitely not alone! There’s been so much conflicting information released since the passing of the Affordable Care Act (ACA) in 2010 that it’s hard to know what to trust anymore. Besides, understanding the basics of health insurance was more tricky enough before Obamacare became law; today, they’re pretty easy to figure out once you know the bottom line prices of each metal tier.
You may not know that health plans on the federal marketplace come in four varieties: bronze, silver, gold, and platinum. Bronze plans offer the least amount of benefits, but platinum plans are more generous and give you more options.
For a single individual, Obamacare costs on average this much per month for each metal tier:
- Bronze – $328
- Silver – $436
- Gold – $482
- Platinum – $732
Keep in mind that these figures are the cost before cost-sharing reductions kick in to lower the price of the monthly premiums. But are there price differences based on where you live in the U.S.?
Why do prices vary state-to-state?
There’s a huge misconception about Obamacare: it’s not a “government takeover” of health insurance. The law didn’t abolish the private health insurance market; it regulates what insurance companies can and can’t do. For instance, you can’t be charged unlimited amounts for your health care if you exceed your benefits cap. Before Obamacare, if you developed cancer and exceeded your benefits cap, the rest of the cost fell on you whether or not you could afford it. People were essentially going bankrupt simply to pay off the medical bills their insurance chose not to cover.
With Obamacare now passed into law, you also can’t be denied if you have a pre-existing condition that you didn’t know about. Before the ACA passed, conditions as routine as pregnancy counted as pre-existing conditions, raising health insurance costs unfairly for those who needed it most.
Since the federal government doesn’t mandate the cost of health insurance premiums, health insurance providers can still freely compete with each other for your business. That’s why the price of a bronze-tier policy in Texas is different from the price of the same policy in Illinois.
Part of the Obamacare law specified that states could operate their own insurance “exchanges” to lower Obamacare costs. Still, unfortunately, many states chose not to make their own markets or expand access to Medicaid. The result is that you have a variety of plans to choose from within each metal tier.
But where did these metal tiers come from? To explain, here’s a short reminder of what the difference is for each one.
What’s the difference between Obamacare metal tiers?
Basically, the difference between Obamacare metal tiers boils down to how much you can expect to pay out-of-pocket and how much of your care’s cost the insurer is required to pay.
When you purchase a bronze-tier plan, you’ll end up paying 40 percent of your care’s cost, and the insurance company will cover the remaining 60 percent. The most significant benefit of a bronze plan is that it’ll come with a lower monthly premium overall. The catch is that when you do need to use the insurance, you may incur high out-of-pocket costs.
In addition, the deductibles for bronze plans are a little on the high side. Although if you want to keep health insurance costs low since you’re in good health, the risk may be worth taking to save money.
When you buy a silver-tier plan, you’re only on the hook for 30 percent of your care’s cost; the insurer pays the other 70 percent. As far as premiums go, silver Obamacare policies are priced reasonably and come with moderate out-of-pocket costs if you have to use the services. The deductibles are also lower than bronze plans.
The catch with a silver plan is that when you qualify for subsidies, you have to pick a silver plan; a bronze plan won’t suffice.
Gold-tier Obamacare plans cover 80 percent of your care’s cost, but you’ll have to pay the remaining 20 percent yourself. The trade-off for this level of savings is that your monthly premiums will be high, but your out-of-pocket costs will be below when you need to use the insurance. They even come with reasonable deductibles considering the range of benefits.
If you know that you’re going to need many services, you might want to think hard about choosing a gold plan, which can also be cheaper with subsidies.
Platinum plans are the most expensive Obamacare plans, but you only have to cover 10 percent of your care’s cost. Your insurance policy covers the rest. The exchange for paying the highest monthly premium is that you’ll always have a low deductible, so if you know you’ll need a lot of services, a platinum plan is a solid choice too.
Which metal tier is most popular?
Over the last few years, as more insurance companies have joined the federal marketplace, the silver Obamacare plans are now the most popular choice. For many people, a silver plan is the best value for the price, considering the premiums are reasonable after subsidies, and the cost of deductibles isn’t too high to make plans not worth the added expenses.
Explaining Obamacare cost-sharing reductions
In short, you earn subsidies to offset Obamacare costs based on your adjusted gross income. This amount will also determine the maximum amount an insurer can charge you out-of-pocket.
If your income is less than 250 percent of the federal poverty line, you’ll never pay more than 8.29 percent of your income in out-of-pocket expenses. If you make less than 400 percent of the federal poverty line, you can’t be charged more than 9.78 percent of your income out-of-pocket.
Where to find affordable health insurance plans and compare quotes
To make finding affordable health insurance more accessible, our platform – ObamacarePlans.com – is a new online health insurance marketplace where you can see quotes on Obamacare health insurance plans – no matter which metal-tier you think will work best.
Ordinarily, you’d have to compare prices manually one-by-one, but you can find the right Obamacare plan much faster and without the hassle when you visit our site. It’s a great way to see what’s available if you’ve never purchased health insurance on your own. All of the plans you see will comply with the ACA’s minimum essential benefits requirement. Depending on your income, you can take advantage of cost-sharing reductions to lower the price even further with a subsidy.
Fill out your basic information and complete a short health screening to see how much we can save you.
Click to find an Obamacare health plan the fast way!