When the Affordable Care Act’s individual health insurance mandate takes effect next year, the newly formed and state and federal health insurance exchanges will offer plans with different coverage levels. Just as those shopping for benefits in the individual and small group marketplaces today can select from a range of plan designs to those accommodate health and financial needs, those purchasing plans for 2014 and beyond can do the same. However, the new law requires non-grandfathered plans to meet one of four “metal levels”—bronze, silver, gold and platinum. These Obamacare coverage tiers are based on the policy’s actuarial value, often referred to as the AV, which is calculated as the percentage of total average costs for its covered benefits.
Metal levels’ will allow you to compare plans with similar levels of coverage, which along with the consideration of premiums, provider participation, and other factors, would help you make an informed decision.
In essence, when you go to purchase a health plan from an exchange, we can determine how much cost-sharing makes sense for you and select the most accommodating coverage. We can then compare bronze plan benefits to bronze plan benefits, silver to silver, and so on.
The metal levels and their AV percentages are as follows:
Bronze plan – 60 percent covered by plan benefits; 40 percent covered by you
Silver plan – 70 percent covered by plan benefits; 30 percent covered by you
Gold plan – 80 percent covered by plan benefits; 20 percent covered by you
Platinum plan – 90 percent covered by plan benefits; 10 percent covered by you
If the selected plan’s actuarial value is high, then you will have fewer out of pocket costs; however, you will pay more in premium. That means a bronze plan will have the lowest premium but will require you to pay more out of pocket when using plan benefits.