Health insurance is a contract between an insurer and a person that pays some or all of a person’s medical expenses.
The key to finding a good plan is choosing the right balance between deductibles, premiums and coverage.
Depending on your budget, you may want to choose a bronze or catastrophic plan. If you’re a frequent health care user, a gold or platinum plan might be more suitable for you.
Bronze and Catastrophic Plans
Bronze plans offer the least coverage but are the cheapest to buy. They have low monthly premiums but high deductibles, which leave you with the largest out-of-pocket costs when you need medical care.
They’re best for people who don’t think they’ll use their health insurance much and are willing to take a financial risk. They also are a good choice for those who qualify for cost-sharing reductions, which can lower their out-of-pocket costs without raising their monthly premiums.
Catastrophic plan are designed to cover major medical expenses for people under 30 and those who qualify for hardship exemptions due to economic or other hardships. These plans don’t cover essential health benefits like preventive care and can have high deductibles.
You can find Catastrophic plans in the Marketplace or through an individual health insurance broker. These plans are standardized into four tiers, called metal levels: Bronze, Silver, Gold and Platinum.
Depending on their income, some people will find that they can receive financial help with their premiums. This type of assistance, called a Premium Tax Credit or Subsidy, can reduce your monthly health insurance bill.
A Silver Plan is one of the lowest-cost options available on the Affordable Care Act (ACA) Marketplace, known as the “metal tier.” It has a moderate monthly premium with moderate out-of-pocket costs when you use it to access medical services. It is the standard benchmark plan on which ACA subsidies are calculated.
When choosing a Silver Plan, you should pay attention to the actuarial value AV, or average cost-sharing value, which shows how much of a plan’s enrollees’ healthcare expenses it will cover on average. However, a plan’s actuarial value should be considered only as a measure of its cost-sharing, not as a determinant of how well the plan will actually cover a person’s healthcare expenses.
Gold Plans are the highest level of coverage available on the health insurance marketplace (marketplace). They have higher monthly premiums than Bronze and Silver plans but lower out-of-pocket costs when you need care.
A gold plan pays 80% of your covered healthcare expenses for a standard population, with you paying the other 20% with your copayments, coinsurance, and deductible payments.
The actuarial value of your plan tells you how much a health insurance plan is expected to pay for its members’ medical bills. The higher the actuarial value, the more your plan is likely to cover.
Each metal level in the marketplace is organized into tiers based on its actuarial value. The more precious the metal, the higher the actuarial value and the lower the cost-sharing charges that enrollees have to pay when they use medical services.
Platinum Plans are a type of health insurance plan that is often used for people who have ongoing healthcare needs that require frequent visits to doctors and specialists. They offer high premiums but low out-of-pocket costs and generous benefits.
Platinum plans are available in the individual market but they are not widely offered by insurers, due to their higher costs. However, if you can afford to pay the higher premiums and don’t mind paying more out of pocket for medical care, this may be the best choice for you.
Platinum plans are a type of metal level under the Affordable Care Act, and they pay an average of 90% of your medical expenses. That means that you’ll pay the remaining 10% in copayments, coinsurance and deductibles.