Which level to choose? – Forbes Advisor

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The federal Affordable Care Act (ACA) makes it easy to purchase a health insurance plan through the health insurance marketplace. Depending on your state, you buy a plan through the federal health insurance marketplace or the state marketplace.

When you shop for health insurance, the ACA Marketplace (on Healthcare.gov) offers you four different categories that vary in cost:

  • Platinum
  • gold
  • Silver
  • Bronze

Understanding what these “metal levels” represent is essential to getting the best health insurance at a price you can afford.

What is Bronze, Silver, Gold and Platinum Health Insurance?

When you shop the health insurance marketplace, you have the option of choosing a health insurance plan that falls into one of four categories: platinum, gold, silver, or bronze.

This is not the Olympics, where “gold” metal is better than “silver”. Metal categories do not indicate the quality of the health care plan. Instead, metal tiers are used to differentiate health plans based on health insurance premiums and out-of-pocket costs.

Example:

  • The Bronze plan has the cheapest premiums, but most out-of-pocket costs when you need medical care. With the Bronze plan, the insurance company pays 60% and the member pays 40%. Upgrade to the Platinum plan, which has the highest premiums and lowest out-of-pocket costs, with the insurer paying 90% of treatment costs and the patient paying 10%.

At first glance, you might think that the Platinum plan would be the best choice for everyone. But this is not necessarily so. The Platinum plan has the highest monthly premiums, while the Bronze plan has the lowest monthly health insurance premiums, so the best option for you depends on how much health care you expect to need in the coming year.

Bronze health insurance plans

Bronze plans have the lowest monthly premiums, which means you can save a lot of money on your monthly health insurance bill, especially if you rarely see the doctor for anything other than an annual checkup.

However, if you need medical care, you will pay more out-of-pocket for medical services with a Bronze plan than with any other type of metal plan. Health insurance deductibles tend to be high, meaning you could be responsible for paying thousands of dollars in medical bills before your health insurance plan starts paying out.

Health insurance companies sometimes also offer Expanded Bronze plans. These plans are similar to Bronze plans, but pay slightly more for medical services than a standard Bronze plan, but not as much as a Silver plan.

Bronze plans tend to appeal to people who want the lowest premiums or perhaps want comprehensive coverage to protect them from high medical costs but are willing to pay more out-of-pocket for treatment.

Silver health insurance plans

Your premiums are higher for the Silver plan than for the Bronze plan, but they’re still lower than the other two plan types.

Out-of-pocket costs will also be somewhat in the middle across all four plans.

Silver plans make sense for those willing to pay a higher premium than Bronze coverage in exchange for lower out-of-pocket costs during doctor visits.

Silver plans are also the best choice for those who qualify for a co-pay discount based on their income. You must purchase the Silver plan to receive these discounts. The ACA Marketplace website takes these cost-sharing subsidies into account when you enter your income information when comparing plans, so you’ll know if you qualify when you apply for a plan.

Gold health insurance plans

Gold health plans have higher premium costs than bronze or silver plans, but lower out-of-pocket costs. Deductibles are much lower.

If you use health care frequently, the Gold plan is more likely to save you money compared to the Silver or Bronze plan. On the other hand, if you rarely go to the doctor, this plan will likely be more expensive.

Platinum Health Insurance Plans

Platinum plans, which are a small fraction of ACA plans, can be a great choice for those who need regular health care. Premiums are the highest of all plans, but out-of-pocket costs are significantly lower. Deductibles are low compared to other plans.

Below is a breakdown of how much you’ll pay for treatment for each metal level, according to the federal government’s Healthcare.gov website:

Percentage cost of Bronze, Silver, Gold and Platinum health insurance plans

Pros and cons of Bronze, Silver, Gold and Platinum health insurance plans

Each metal level in the health insurance market has its pros and cons. The right choice for you depends on your expected medical needs for the year and your budget.

Pros and Cons of Marketplace Health Insurance Plans

How to choose between Bronze, Silver, Gold and Platinum health insurance plans

When choosing a metal tier, your main decision is how much you want to pay in monthly premiums and how much of your service you’re willing to pay out-of-pocket. As a general rule, the lower your expenses in one of these areas, the higher they will be in the other.

Also, if you want to be eligible for the co-pay discount, you must choose the Silver plan.

In addition to the metal level, you also need to figure out what type of health insurance you want, such as an HMO or a PPO. What you choose affects whether you can get out-of-network care and whether you need referrals to see specialists.

The four most common types of health insurance plans are:

  • Exclusive Supplier Organization (EPO): A managed care plan requires members to receive medical services within the plan’s network. Only emergency care is exempt from this requirement.
  • Health Maintenance Organization (HMO): This type of plan is similar to an EPO and usually limits coverage to services obtained from doctors who work for or contract with an HMO. Outside of this network, only emergency care is covered.
  • Point of Service (POS): With this type of plan, you pay less when you use medical services within the plan’s network. To see a specialist, a referral from a primary care physician is required.
  • Preferred Provider Organization (PPO): This type of plan allows you to go outside the provider’s network for an additional fee. You don’t need a referral to see a specialist if you have a PPO plan, so there’s more flexibility, but it usually comes with higher premiums.

Questions to ask yourself when choosing health insurance

Choosing the right health plan is important. Before you buy a plan, ask yourself some important questions, such as:

  • How often do I usually see my doctor? How important is it that my current doctors are part of the network of any new plan I may choose?
  • How much care do I expect to need in the next year?
  • Will I need any procedures or treatments in the next year?
  • Do I need to take prescription drugs?
  • Will I have enough money to pay for out-of-pocket expenses?
  • Do I want to pay higher premiums and lower out-of-pocket costs when I need help, or vice versa?
  • How important is it that I have a low deductible, or would I rather save on premiums and pay more when I need help?
  • Do I want the freedom to go outside of my plan’s network for treatment?

Answering these questions will help you narrow down your health insurance plan choices.

How to save on Bronze, Silver, Gold and Platinum health insurance plans

You can significantly reduce your health insurance costs if your income qualifies for a tax credit. This is true regardless of the metal layer.

The amount of tax credit you are entitled to will depend on your estimated family income. You’ll need income information when you apply for insurance coverage to find out if you’re eligible for a tax credit and how much you can expect to get back as part of the credit.

The federal government’s website, Healthcare.gov, also has a tool to help you find out if you qualify for a loan.

If you qualify for the credit, you pay lower premiums and the health insurance marketplace will pay the amount of the tax credit to your insurance company. This means you pay a lower monthly premium right away and don’t have to wait to claim the credit when you file your tax return.

Because this credit changes the amount you pay each month for your insurance premium, you must notify your health insurance marketplace immediately if your income changes (increases or decreases) during the year.

Depending on your income, you may also be eligible to save on your health insurance costs through a so-called cost-sharing reduction. This can reduce the amount you pay for deductibles, copayments and coinsurance.

However, you must purchase the Silver plan to receive these discounts. When you apply for health insurance, you’ll find out if you’re eligible for these discounts. Or you can use the same tool that the state provides to assess your tax credit eligibility to see if you qualify for a cost-share reduction.

Find the best health insurance companies in 2022

Frequently asked questions

Are Gold health insurance plans the best?

Gold plans aren’t necessarily the best, but they may work for you if their cost structure fits your budget. Metal categories simply help health insurance buyers better understand how the cost of health care is shared between the patient and the health insurance company.

What is the cheapest ACA marketplace plan?

Bronze plans are the metal tier with the lowest health insurance premiums. But that doesn’t necessarily make them the cheapest of the year for everyone.

For example, if you require a lot of care, the money you save on Bronze plan premiums may pale in comparison to the out-of-pocket costs you’ll incur with such a plan.

And if you’re eligible for a co-payment reduction, the Silver plan is likely to be the cheapest choice.

In short, your own health care needs and your budget will determine which ACA health insurance plan will be the “cheapest” for the year.

What is the maximum out-of-pocket limit for ACA plans?

In 2022, the out-of-pocket maximum cannot exceed $8,700 for an individual and $17,400 for a family. Out-of-pocket maximums in the ACA marketplace change each year. In 2023, the out-of-pocket maximums for individual coverage will be $9,100 and $18,200.

The federal government says these out-of-pocket limits do not include:

  • Monthly health insurance premiums
  • Medical expenses not covered by your plan
  • Out-of-network support and services
  • The costs that the provider may charge exceed the allowable amount for the service

What is the “actuarial value” of an ACA plan?

When it comes to marketplace plans, actuarial cost refers to the “percentage of the total average cost of benefits covered by the plan,” according to Healthcare.gov.

The website provides an example of a plan with an actuarial value of 70%. This means that, on average, you are responsible for 30% of the cost of all insurance benefits, including your health insurance deductible.

However, it is important to note that your health care needs and the terms of your insurance policy will determine whether you are responsible for more or less of the total costs than what the actuarial value would suggest.


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