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Please begin with an informative title:

There's tons of stuff you need to figure out to make a smart decision about choosing a health plan, but there's one set of widely-quoted numbers that really doesn't figure in to your decision.

It's becoming apparent since the advent of the Exchanges is that  each of us is now going to have to become as expert in understanding the intricacies of choosing health plans as a benefit-specialist in an HR department.

Up until now people getting employer-paid health plans had a handful (if they were lucky) of pre-selected plans to choose from, or just the only plan offered by the employer. Take it or not. (Federal employees have usually had many more plan options, Lucky them!)

People who have been self-employed or seeking individual coverage rarely had the luxury of much choice.

But it's a whole new world out there.  In my area of upstate NY I have (compared to most areas) a relatively thin menu of plans: only eight companies, each offering an HMO plan in each tier.  Many areas have dozens of insurance companies so it becomes very complicated.

More below the intricately tangled skein of health plan details swirling around:


You must enter an Intro for your Diary Entry between 300 and 1150 characters long (that's approximately 50-175 words without any html or formatting markup).

There have been many very useful diaries about the overall scope of the plans, but I thought it might be useful to break some of the info down into individual little pellets of data.  

I thought I'd start out with some information you can safely just let flow by you.  And while it is useful to be generally aware of, it is also VERY important to be sure you are not applying it incorrectly when trying to figure which plan/level to choose.

This is the ACTUARIAL VALUE of the metal-tier plan levels which has gotten wide play in descriptions of the new plans. Since there was precious-little else known about the plans before last week the actuarial values have been cited ad nauseam for months.  It is the definitions of the actuarial value that the various metal tiers of the plans must meet in order to be considered eligible for the Exchanges.

It's about how much, in the aggregate, a plan's overall liability for care is divided between the insurance companies payment and the insured people.  It has nothing to do with what any individual patient might pay for any particular service.

Actuarial values of a particular plan include the cost of the care that you aren't paying for such as the preventive care parts and what the company pays for all the other care the subscribers receive as percentage compared to what the subcribers' payment share.  And keep in mind that this includes ALL subscribers in the plan. Individually one subscriber may be very healthy and use very little care and never meet their deductible. Another subscriber may be unlucky and blow right through their deductible and reach their out of pocket maximum cap, which means that the company will be paying 100% of their care after that. All of the subscribers in the plan, and all of the costs for all of their care, are added together when determining the actuarial value of the plan.

As an example, Bronze plans must have an actuarial value of 60% (paid by insurance co.) and 40% (paid in the aggregate by all the person on the plan).  Other higher level plans have different actuarial values ranging all the way up to 90/10 for a Platinum plan.

It's easy to misunderstand these percentages and confabulate them with the co-pays and co-insurance amounts within the plan. But in fact, aside from knowing generally about the actuarial levels, you can pretty must pay no attention to them, because they have nothing to do with what you will have to pay at the doctor's office or pharmacy.

The details of what the charges you will have to pay are included in the Plan Details which you can get from the individual insurance companies.  Please note that in some states (NY, for example) the state has defined the "NY Standard Plan" for each tier.  This means that the co-pays/co-insurance amounts are standard from plan to plan within a tier.  The insurance company can have a more generous - to you - rate schedule, but they can't be more stingy and ask more within a certain tier. So you may be able to save time and check your state's website to see if they, like NY, have established a state standard for each tier.  The National Exchange may also have an established definition of plan cost details for each tier. If a plan is described as the "standard" plan, then it's simple to compare them within a tier.  This is one of the goals of the ACA.

These Plan Detail tables are different from the actuarial value split percentages for the tier level, discussed above.

They are also different from the defined list of "essential care" components that must be in every plan, that's about what must be covered in each plan.

What you want to drill down to is the schedule of what are the co-pays, co-insurances and cost shares. And this is where what you are going to pay can get confused with actuarial value because these (co-insurance and cost sharing) are often expressed as percentages, too.  But they are based on paying a percentage of the insurance company's negotiated rate with the provider for different categories of services, and rarely do they match the plan's actuarial percentage numbers.

So, in general put the actuarial percentages out of your head when you are trying to figure out which plan-level  is right for you.  It means nothing that's useful individually to any subscriber. Go for the plan details, instead.  That's what you will actually be paying.


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Originally posted to Araguato on Mon Oct 07, 2013 at 08:30 AM PDT.

Also republished by Community Spotlight.

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