When searching for a health insurance plan in the Marketplace, you may have noticed that each one has a type of metal – bronze, silver, gold, or platinum, attached to it. These are known as the four metal tiers and provide insight into the amount you will need to pay each month for the plan (the premium), along with amounts you may need to pay when you get health care (go to the doctor or hospital, etc.).
Nice To Know: While you’re shopping for health coverage, it’s important to fully understand what share of your expenses the insurance company will pay for and what you’ll be expected to pay out of pocket so there are no surprises once you enroll. This is where these different metal categories come in – they each have tradeoffs. The tradeoffs are between the fixed monthly premium amount and the associated costs for any actual care that you receive.
We know reviewing all this information can be overwhelming, so we’ve broken down everything for you below.
Nice to Know: One of the benefits of shopping for a QHP (qualified health plan) is the use of the metal tiers. Not all health insurance plans use the metal tiers, but those who do use the same definitions as we have outlined here. For example, employer-sponsored plans don’t have to use them, though many do.
Why the health plans are grouped in metal tiers
You know how some metals are more valuable than others, making them cost more? Think of the health insurance metal tiers in the same way! High-value plans cost more in monthly premiums, but you pay less out of pocket.
We’ve created this helpful chart that illustrates what you will cover out-of-pocket, and what insurers will pay.
Nice to Know: Even if you pick the highest-value plan (platinum tier), you’ll still have to pay some of your medical bills. You may need to pay your entire deductible before your plan pays any of your health care bills.
What the metal tiers mean
The metal tiers are solely based on how you and your chosen plan split the costs of your health care. They have nothing to do with the quality of care! Keep that in mind while comparing your options, as you don’t want to write off a tier that could be a good fit for you.
The overall breakdown of the metal tiers is as follows:
*Also known as cost-sharing reductions. Learn more about what that means here.
Nice To Know: Plans in all tiers provide free preventive care, and may offer selected free or discounted services before you meet your deductible.
In addition to all the metal tiers, there’s catastrophic coverage, which is a type of high-deductible health plan for people under 30 or for those who qualify for a “hardship exemption” (an event that prevents an individual from obtaining health insurance). These plans are meant to protect you in a worst-case scenario (ex: a medical emergency).
Nice to Know: If the monthly premiums are relatively low (which they are in a catastrophic plan), it means the deductible is much higher than any of the four metal tier plans. You will have to pay for all health-related costs until you reach the plan’s annual deductible, which is around $8,150 for 2020.
Which metal tier is right for you?
Generally speaking, silver plans are the most popular choice in the Marketplace, with 57% of people choosing this tier in 2020 alone. However, that may not be the best choice for YOU. A few things to keep in mind:
- When making a decision, you don’t want to simply choose a plan just because it has a low premium. Getting coverage for the lowest possible monthly price might feel like a steal, but remember, since these plans usually have higher deductibles, you may save now, but you’ll end up paying more in the long run, if you need a lot of care during the plan year.
- If cost is a concern, check to see if you qualify for subsidies. If you qualify for financial help in the form of cost-sharing reductions, then a silver plan may be best for you, as you can only get the savings to help pay for copays and coinsurance if you have a plan in this tier. You may also qualify for the APTC. If so, your tax credit is dependent on your annual income, so the dollar amount won’t change regardless of what metal tier you choose. If you’re not sure whether you’re eligible for a subsidy or not, use W3ll’s subsidy calculator to see what savings you qualify for!
- Keep in mind that the percentages listed in the chart above aren’t 100% accurate. Those numbers reflect how much value each tier plan is supposed to provide, but the actual value you receive may be lower or higher. This is because the percentages are based on “actuarial value,” which means it’s an average. depending on how much care you need throughout the plan year, your out-of-pocket copayments, or coinsurance costs may be higher or lower than said average.
For example, if you only use your bronze-tier plan for small things (checkups, tests, prescriptions, etc.), then the percentage of costs your plan pays will be a lot less than 60%, and almost everything will come out of deductibles and copays. If you have a big medical expense in a given year, then your bronze-tier plan will cover well over 60% of the cost.
Ultimately, it’s best to consider if you (or any family members that rely on your insurance) have any ongoing medical issues and/or expenses. If the answer is yes, you may want to opt for a plan with a higher monthly premium. Additionally, you’ll want to factor in risks for any unexpected medical care expenses (i:e a broken bone), as this will increase your out-of-pocket costs. While there’s no way to predict the future, think about whether or not your job or hobbies include activities where an accident could potentially happen.
Even though this decision is focused on your health and wellbeing, it really is a financial decision as well. Taking the time to make sure you have all the information you need could save you stress and money in the future.
If any terms in this post were unfamiliar to you, don’t stress! Check out our healthcare glossary here.
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