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.
According to HealthCare.gov, “’Metal levels’ will allow consumers to compare plans with similar levels of coverage, which along with the consideration of premiums, provider participation, and other factors, would help the consumer make an informed decision.”
In essence, when we go to purchase a health plan from an exchange, we can determine how much cost-sharing makes sense for us 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 the consumer
Silver plan – 70 percent covered by plan benefits; 30 percent covered by the consumer
Gold plan – 80 percent covered by plan benefits; 20 percent covered by the consumer
Platinum plan – 90 percent covered by plan benefits; 10 percent covered by the consumer
If the selected plan’s actuarial value is high, then the consumer will have fewer out of pocket costs; however, he or she will pay more in premium. That means a bronze plan will have the lowest premium but will require the consumer to pay more out of pocket when using plan benefits.
Use the Health eDeals Health Reform Calculator to estimate your annual insurance premium at each metal level. You may also estimate your tax credit, if eligible, and your opt-out penalty.
Jenifer Dorsey is a freelance writer whose specialties include health and fitness, wellness, sports and recreation. She is a competitive amateur track cyclist who also enjoys mountain biking, hiking, camping and other outdoor adventure. Jenifer received a B.A. in journalism from Columbia College Chicago and is an MFA candidate at Naropa University. She lives in Colorado.