Health insurance plans that have low premiums but require you to pay more out of pocket
Published August 19, 20194 min read
Table of contents
A bronze plan is the lowest tier of Obamacare’s four tiers (all of which are named after metals)
Bronze plans require you to pay the most out of pocket for health care
These are best for people who are healthy and don’t visit the doctor much
The Affordable Care Act (ACA), also known as Obamacare, made it easier to compare health insurance plans by dividing them into four tiers. Plans are categorized into one of the four tiers based on how the cost of health care services are split between you and the health insurance company. The tiers are named after metals — bronze, silver, gold, platinum — and so they are also referred to as the metal tiers.
Bronze plans have the least expensive premiums, but the highest copays and coinsurance costs in the Affordable Care Act marketplace. That means you will have to pay more out of pocket if you get sick than you would for other plans. Bronze plans usually have a high deductible as well.
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A bronze plan may be a good deal if you rarely go to the doctor, but it will probably leave you paying more than other plans if you regularly visit the doctor. It’s important to know that these tiers don’t represent the quality of service you get. They only show you how you will split health care costs with your insurance company.
Bronze plans are the lowest level of the metal tiers, which means you will have to pay the most out of pocket for your health care expenses. Generally, that means the insurance company pays 60% of health care costs and you pay 40%. This primarily applies after you’ve passed your deductible. So if you pay $100 over your deductible, your insurance will generally cover about $60, leaving you to pay about $40.
The 60/40 split isn’t strictly the same as coinsurance, though. Insurance companies can calculate your premiums and other costs based on how much you’re likely to pay for your deductible, copayments, and coinsurance. You should talk to your insurance company to learn more of the specific details for your plan.
Related article: See how much Obamacare costs in each state.
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At the same time, these percentages aren’t necessarily the exact cost you pay for your medical expenses. They’re a benchmark and your exact spending may be a bit higher or lower. Depending on what services you use throughout the year.
Insurance companies cannot sell plans through Obamacare’s health insurance marketplace unless they meet a certain standard and cover these 10 essential health benefits:
Pediatric services, including dental and vision coverage for children
Hospitalization for surgery, overnight stays, and other care
Mental health and substance use disorder services
Pregnancy, maternity, and newborn care
Ambulatory patient services, which is outpatient care you receive without going to a hospital
Rehabilitative and habilitative services and devices (treatments and devices that help gain or recover your mental and physical skills after an injury, disability, or onset of a chronic condition
Learn more about the 10 essential health benefits that all plans need to cover.
Bronze plans are a good option for healthy individuals who rarely go to the doctor. You should consider one if you mostly visit your doctor for preventive care services.
You should consider another tier of health plan if you go to the doctor more regularly, like if you’re managing a chronic condition. Even though bronze plans have the lowest monthly premiums, you will end up paying more of your own money before you hit your out-of-pocket maximum (the amount you pay before your health insurance company starts paying 100% of your healthcare costs).
One of the main advantages of bronze plans is the low premium. If you think you would benefit from getting a plan in a higher tier, but you can’t afford the premiums, consider a premium subsidy.
Premium subsidies reduce your premium payments, so they can help you afford a plan with better coverage that you otherwise wouldn’t be able to afford. You can qualify for a subsidy if your household income is 100% to 400% above the federal poverty level (also known as the federal poverty guidelines).
Subsidies work as a tax credit — the advance premium tax credit (APTC) — and you get money back when you claim the tax credit on your federal tax return.
If you simply want to pay as little as possible for insurance premiums, look into a catastrophic health insurance plan. These plans are designed to have low monthly premiums while offering protection in worst-case scenarios.
Now, catastrophic plans aren’t for everyone. For starters you can only get one if you are under age 30 or if you qualify for a hardship exemption. Even if you qualify, catastrophic health insurance is best for healthy individuals because it covers only the basics, so you don’t have to pay more for services that you wouldn't normally need.
You might also want to consider a catastrophic plan if you have a financial hardship and just need to get insurance. This is less common now because Obamacare’s individual mandate penalty isn’t in effect, but some states do require everyone to have health insurance.
To sign up for a bronze plan (or any other health insurance plan) you need to wait until open enrollment. That’s the period — from Nov. 1 to Dec. 15 — when you can sign up for a new health insurance plan. Whatever plan you choose will take effect starting in the next calendar year, on Jan. 1.
The only exception is if you qualify for special enrollment. In order to qualify, you need to experience a qualifying life event (QLE), which is a major change in your life. Common examples are getting married or divorced, having a baby, and starting work for a new employer.
Learn more about special enrollment and how you can qualify.
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