When the Affordable Care Act’s (ACA) state-based and federally facilitated health insurance marketplaces opened for business on Oct. 1, 2013, we were introduced to a new way of selecting health insurance: by actuarial tier, aka metal level.
These tiers were primarily established to1:
- Set a minimum amount of coverage people must have to satisfy the individual mandate.
- Establish standardized levels of major medical insurance available through HealthCare.gov, the state-based exchanges and the private market.
- Set a benchmark for premium tax credits and cost-sharing reduction subsidies.
Meet the four ACA metal levels
All individual major medical health insurance plans on the market today are categorized into four tiers by actuarial level—actuarial levels represent the percentage of total expected expenses paid for by the health insurance policy.2 Under the ACA, these tiers have been assigned a metal name: bronze, silver, gold or platinum.
The four metal levels and their estimated average actuarial value percentages are as follows3:
1. Bronze: 60% of covered medical expenses paid by the policy / 40% paid by the consumer
2. Silver: 70% of covered medical expenses paid by the policy / 30% paid by the consumer
3. Gold: 80% of covered medical expenses paid by the policy / 20% paid by the consumer
4. Platinum: 90% of covered medical expenses paid by the policy / 10% paid by the consumer
Which metal plan should you choose?
In general, the lower your health insurance policy’s out-of-pocket expenses, the higher your monthly premium and vice versa.
You may want to choose a bronze plan if you typically see the doctor for preventive care and do not anticipate many medical expenses throughout the year. Typically, you will pay the most out of pocket and the least in monthly premium with a bronze health insurance policy.
Monthly premium: $
Deductible + out-of-pocket expenses: $$$$
You may want to choose a silver plan if you tend to require a few trips to the doctor each year, take a prescription medication and want to keep your deductible a bit lower. If you qualify for a cost-sharing reduction, then you must select a silver plan to receive that subsidy.
Monthly premium: $$
Deductible + out-of-pocket expenses: $$$
You may want to choose a gold plan if you make frequent trips to the doctor, have health conditions that require ongoing medical attention, and want to keep your deductible low.
Monthly premium: $$$
Deductible + out-of-pocket expenses: $$
You may want to choose a platinum plan if you expect your medical expenses to be substantial and want the lowest deductible possible. Typically, you will pay the least out of pocket and the most in monthly premium with a platinum health insurance policy.
Monthly premium: $$$$
Deductible + out-of-pocket expenses:$
Some people qualify for a subsidy to help offset their ACA plan premium. Use our subsidy calculator to find out if you qualify.
Not sure which plan is right for you? Use Agent Finder to search for a local agent who can assist you.
What if you select a high-deductible plan and need healthcare?
While a low monthly health insurance premium can be appealing, it is often paired with the highest plan deductible.
For instance, you could qualify for a premium tax credit that brings your monthly bronze plan premium down to little or nothing. However, that bronze plan will include a deductible that must be met before your health insurance policy benefits fully take effect, and you will pay out of pocket toward that amount. In 2018, the average bronze plan deductible was $5,873.4
One solution is to purchase additional benefits in the form of supplemental health insurance with the money you save on the premium. While they are neither ACA-compliant nor do they cover essential health benefits, gap policies are a type of supplemental health insurance that pays lump-sum benefits for covered accidents and illnesses. You can use these benefits however you choose.
Do plan benefits differ by metal level?
The ACA requires that all major medical insurance plans include the same minimal coverage for healthcare items and services in the 10 categories of essential health benefits. Carriers may choose to offer more than the minimum essential health benefits, however, and that is where plans could vary slightly.
Cost, including plan premium and deductible, will be the biggest difference you will notice between metal levels. That is why it is important to shop with cost-sharing in mind and determine what share of covered medical expenses you and your family can afford if you need healthcare.
Summary + next steps
Health insurance companies are not required to offer plans for all four metal levels. That means certain carriers may choose to offer bronze and silver plans on the exchanges while others might offer only gold and platinum plans.
Work with a health insurance agent to determine what level of coverage might best suit your family’s budget and typical healthcare needs throughout the year. Use Agent Finder to search for an agent near you.