When the Affordable Care Act was introduced, plans were categorized into metal tiers. In part, officials sought to make choosing a plan easier for consumers. Each metal, from bronze to platinum, would represent the generosity of coverage much like the metals would in true form. Gold is more valuable than bronze; thus, a gold plan would assume to be better than a bronze plan.
While the metal tier categories certainly help, many consumers still have questions about the various differences in premiums, coverage, and out-of-pocket healthcare costs. There’s more to choosing the right health insurance plan than browsing the shiny metal-titled lists. Today, we’ll outline three key distinctions to help you better understand the metal tiers behind the plans.
1. Differences in Actuarial Values
Of the four metal tiers available, platinum, gold, silver, and bronze, each represents an estimate of what percentage of costs can be expected to be covered. It’s not necessarily based on what you pay, but rather an average of what the population will use overall. These estimates are called actuarial values. Here’s what they mean to you.
Metal Tier Actuarial Values
When you see plan labels with actuarial values, it’s important you understand what these percentages mean in terms of costs. The ACA designates each plan with one of these values, and it represents the amount that must be covered by the health insurance company. For example, if you’re looking at a bronze plan with a 60% actuarial value, you can expect to be responsible for 40% of your healthcare costs. Silver plans might offer a 70% actuarial value, meaning you’ll pay roughly 30% of your expenses. Gold tiered health insurance plans have 80% actuarial values, and the platinum plans rank higher at 90%.
How Actuarial Values Are Determined
Typically, these percentages are based on the CMS’s evaluation and determinations. In the 2021 actuarial value calculator, the CMS considered three types of data. Unaffected by the pandemic conditions, the 2021 AVs were calculated on 2017 small group and individual claims. Population demographics and plan types also contributed to these values. And for 2021, the AV Calculator has a cap on enrollee spending of $1 million.
Variances in Actuarial Values
As a consumer shopping for health insurance, these actuarial value percentages may change based on a few key considerations. If you fall into a low-income category, for example, the metal tier percentages may become adjusted. Those with a health savings account or who qualify for cost-sharing subsidies may also see a difference in ratios. For example, one insurance plan may have a lower coinsurance rate and a higher deductible to meet the AV Calculator benchmarks. A competing health insurance plan might offer to pay for all physician visits before meeting the deductible, but with a higher coinsurance rate.
2. Differences in Coverage and Out-of-Pocket Costs
What most consumers are most interested in are the costs and health insurance coverage options. The metal tiers can help you sort out the plans based on these priorities. The higher the tier, the lower the out-of-pocket costs. But if monthly premium budgets are tight, the lower tiers may be more attractive because of the lower upfront costs. Here’s how they break down, according to Healthcare.gov.
These health insurance plans typically come with the lowest monthly premiums. However, you can expect to pay more out of your own pocket for each healthcare visit. Be mindful of the high deductibles with these plans, too, as they can be several thousands of dollars. These types of plans can be ideal for those who consider themselves relatively healthy, without many anticipated healthcare needs throughout the year.
These plans tend to be more popular as they offer moderate-level monthly premium costs. Additionally, the amount consumers are required to pay for healthcare services is also considered moderate. If you are eligible for any cost-sharing reductions, you might be required to select a silver plan to capitalize on those benefits. These health insurance plans, with realized cost deductions, can save you thousands.
Gold and Platinum Plans
With gold and platinum plans, you’ll see higher monthly premium costs. Alternatively, the deductibles for these plans are significantly lower than bronze or silver plans. For those who anticipate more than routine healthcare needs throughout the year, these plans can be the best values.
3. What Won’t Be Different Regardless of the Plan You Choose
As you weigh your budgets and healthcare needs, it’s important to know what won’t be affected by the metal tiers. There are certain requirements mandated by the CMS that all health insurance plans are required to cover. These essential health benefits must be covered by all plans, regardless of the metal tier category. The metal tiers represent the coverages and costs of the plans but never indicate a difference in healthcare services themselves, nor do they represent different qualities of care.
Any visits to the emergency room will be covered by any Marketplace health insurance plan. Hospitalizations are also listed as essential health benefits, along with associated lab tests. Not that anyone anticipates an ER visit. But any plan you select will offer coverage should you need it.
Any maternity or prenatal care will be covered by all bronze, silver, gold, and platinum plans. Ambulatory care, pediatric services, and rehabilitative care are also requirements for health insurance companies. As you look for a new plan, you can breathe a little easier knowing these services will have coverage.
Preventive Care Services
Any preventive care services, like routine annual visits with your provider, will be covered by any tiered metal plan. This requirement can inspire consumers to make those appointments and take advantage of early detection and preventive solutions. Prescription drugs are also included in the essential care lists.
When you’re ready to explore your health insurance options, browse with W3ll. We can help you sort the various metal tier categories and help you leverage any premium tax credits for which you qualify. Get a better understanding of the metal tiers and the differences between these plans to enroll today!