ObamaCare Simplified

The Patient Protection and Affordable Car Act (ACA), also known as Obamacare, requires everyone to have health insurance by March 2014 or pay a penalty based on their total annual income. To help lower-income individuals and families afford insurance, the government will pay a portion (subsidy) of the monthly insurance premium. The amount of the subsidy varies based on income and family size. 

Once income reaches four times the poverty level, the subsidy disappears, as follows:

INDIVIDUALS
$45,960

COUPLES
$62,042

FAMILY OF 3
$78,120

FAMILY OF 4
$94,200

FAMILY OF 5
$110,280

...etc

For individuals who quality for a subsidy, the federal government created healthcare exchanges where individuals can shop for and purchase insurance. There are four categories of insurance coverage: Bronze, Silver, Gold, and Platinum. Each category differs in terms of monthly premium, deductibles, and copays. A Bronze Plan has the lowest monthly premium, but the highest deductible and copays. Platinum has the highest premiums, but lowest deductibles and copays. California’s healthcare exchange is www.coveredca.com. You can log on, enter your annual gross income, family size and ages, and view the plans available for you. Each plan shows your monthly premium costs and corresponding benefits, copays and deductibles. Higher incomes result in lower subsidies and higher premium costs.


Bronze Plan May Be Best Choice

In nearly all cases, the difference in monthly premium costs between the Bronze and Silver plans is substantial. In these cases, an individual could purchase the Bronze Plan, buy a Prestige membership, and still save money compared to purchasing a Silver Plan. In addition, Silver Plans still have high deductibles and copays (except where family income is below 2.5 times the poverty level). This represents additional out-of-pocket expenses for


Potential Cost Savings

The following examples illustrate the potential cost savings of purchasing a high-deductible Bronze plan plus a Prestige membership,
compared to buying a more expensive Silver Plan:


Example 1

Family of four with gross annual income of $65,000. 
Adult ages: 34 and 36 with two children.


Bronze Plan

Monthly Premium: $679
Subsidy: $458
Monthly Payment: $221

Silver Plan

Monthly Premium: $908
Subsidy: $458
Monthly Payment: $450

Monthly Cost Savings from Buying Bronze Versus Silver Plan: $229
Annual cost savings from buying Bronze Plan and Prestige Membership for $147/month:  $984
Estimated additional out-of-pocket copays on Silver Plan*: $690
Potential annual cost savings for this family: $1,659

*(Note: Estimated copays are based on national average of four visits per year for each family member with one fourth of those visits to an urgent care clinic. Actual copay costs will depend actual number and type of patient visits.)

The family in this example will potentially save $1,659 on their everyday healthcare costs and gain all the benefits of Prestige HD membership.


Example 2

Couple with gross annual income of $35,000
Both Adult ages: 35


Bronze Plan

Monthly Premium: ?
Subsidy: ?
Monthly Payment: $42

Silver Plan

Monthly Premium: ?
Subsidy: ?
Monthly Payment: $193

Monthly Cost Savings from Buying Bronze Versus Silver Plan: $151
Annual cost savings from buying Bronze Plan and Prestige Membership for $109/month: $504
Estimated additional out-of-pocket copays on Silver Plan: $450
Potential annual cost savings for this family: $954


Example 3

Individual with gross annual income of $35,000
Age: 35


Bronze Plan

Monthly Premium: ?
Subsidy: ?
Monthly Payment: ?

Silver Plan

Monthly Premium: ?
Subsidy: ?
Monthly Payment: ?

Monthly Cost Savings from Buying Bronze Versus Silver Plan: ?
Annual cost savings from buying Bronze Plan and Prestige Membership for $109/month: ?
Estimated additional out-of-pocket copays on Silver Plan: ?
Potential annual cost savings for this family: ?


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