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TONY WILSON: Fed to unveil Ga. medical plan options in October

Tony Wilson

Tony Wilson

This fall, if you hear from one of your friends that he went platinum, it won’t necessarily mean he sold 1 million records.

Instead, what it may mean is he elected a specific medical plan option available on the Health Insurance Exchange the federal government is setting up for Georgia as part of the Patient Protection and Affordable Care Act (PPACA).

As we discussed last week, the Exchange is a website platform (www.healthcare.gov) where individuals and families can purchase health insurance coverage from carriers that participate in the program. Open Enrollment will begin Oct. 1 for a Jan. 1 effective date.

To simplify the plan offerings and hopefully help eliminate some confusion, plans offered through the Exchange will fall into one of four categories: bronze, silver, gold and platinum. (Feel like you are at an Olympics medal presentation ceremony?)

This is similar to steps taken years ago to streamline plan options available to seniors in the Medicare Supplement Plan (MSP) market. Today, if a person is interested in MSP Plan F, for example, the Plan F offered by BCBS is the same Plan F as offered by United Health Care or any other carrier in the MSP market.

Simplifying the plan benefits and making them consistent from one carrier to another has made it much easier for seniors to compare plans and focus on two other key components: cost and carrier.

The Exchange plans should operate in a similar fashion with color designations showing the plan offering falls into a certain range from an actuarial value perspective.

Rather than a long-winded explanation of what actuarial value is, let me say that generally speaking in a bronze plan the carrier is going to pay 60 percent of the costs of covered benefits and the insured will pay 40 percent of the benefit costs. In a silver plan, the split would be 70 percent to 30 percent, in a gold plan 80 percent to 20 percent and in a platinum plan the split is 90 percent to 10 percent.

While the final pricing and the Exchange plan offerings for the bronze, silver, gold and platinum plans are still in the works for Georgia, the bronze plans should be the lower cost plans from a monthly premium perspective since the covered member would be responsible for more out-of-pocket costs at time of claim.

As you move up the scale toward the platinum plan, the monthly premiums for the plans are likely to be higher since the plans are paying more of the out-of-pocket costs.

An important note: the monthly premium you pay for an Exchange plan is not factored into the out-of-pocket cost or the actuarial value. Only the costs associated with the actual covered benefits are factored into the percentage splits.

The 10 percent to 40 percent of out-of-pocket costs in a plan that an insured would be responsible for paying would include the deductible, copays, coinsurance and other such costs. Plans with different deductibles, copays and coinsurance costs could still fall into the color designated category as long as the plans based on their actuarial value fall into the percentages splits previously outlined.

Since the federal government hasn’t rolled out its specific Exchange for Georgia, I took a look at what is available in some other states.

On the Covered California website the options were limited to four plans total — one platinum, one gold, one silver and one bronze option.

In Massachusetts, the Health Connector website showed eight benefit packages with a total of 60 plans offered. The bronze plans, for example, were broken down into four tiers with a total of 31 plan options.

I’m not sure if offering 60 plans helps “simplify” the process or not while only offering one plan in each category may not be enough. We will see what the Feds have to offer Georgians come Oct. 1.

Questions or comments? Feel free to e-mail me at twilson@nfp.com.

Tony L. Wilson is a principal with NUVISION Financial Corporation based in Conyers. NUVISION is a subsidiary of National Financial Partners Corp. (NFP), which provides benefits solutions for companies.