The Affordable Care Act (ACA) has made it easier for people without access to health insurance through their employers to purchase individual coverage. One of the main ways it has done this is the creation of the Health Insurance Marketplace. Where you can go to compare and shop for plans. These plans are much more standardized than plans were before the ACA, since they not only must now all cover the “10 essential health benefits,”. But they are also categorized into four “tiers” of coverage.
So, the first thing you should do if you’re in the market for individual health insurance is familiarize yourself with these tiers. Which are each named with a different metal type (Platinum, Gold, Silver, and Bronze). These different tiers do not indicate differences in quality of care. But in the percentages that you and your health insurance company will pay for your care.
In the sections that follow, we’ll break down the various health insurance metal tiers, as well as explain how to find out if you’re eligible for cost-sharing subsidies to help you choose the best plan for you and your family.
Health Insurance Plan Expenses
Before we get into the individual tiers, let’s take a look at the different expenses associated with all plans. There are five primary expenses you should be aware of, and they change from plan to plan. Make sure that you have accounted for these expenses in your plan’s budget.
In order to maintain insurance coverage, you’ll have to pay a monthly premium (or yearly premium if you prefer to pay in a lump sum). Premiums for plans will vary widely, but generally speaking, Bronze plans have the lowest premiums, followed by Silver plans, Gold plans, and Platinum plans.
A copay is a fixed amount that you will pay at the time of service for a medical service, or to see a doctor or specialist.
Your policy’s deductible is the amount you’ll be responsible for paying before your insurance company begins covering any of your expenses. If your policy has a $1,500 deductible, for example, you will be responsible for paying that amount on covered care before your insurer begins paying for anything.
Bronze plans typically have the highest deductibles, meaning you’ll have to pay more out-of-pocket before your insurance kicks in. A Bronze plan’s deductible may be nearly twice as high as that of a Silver plan. Platinum plans typically have the lowest deductibles.
Even after you’ve met your insurance plan’s deductible, you will most likely still have to pay a portion of your medical bills out-of-pocket, known as your coinsurance. A common coinsurance percentage is 20%, which means that once your deductible has been met (or until your out-of-pocket maximum has been reached), your insurance will cover 80% of your medical expenses, and you will pay the remainder. You can expect to pay the highest coinsurance for a Bronze plan.
The cost-sharing structure of the metal tiers is often misunderstood as coinsurance. Coinsurance is not the percentage that your Bronze plan covers (on average, 60% of consumer costs). All of your out-of-pocket costs (copays, deductible, and coinsurance) are included in the cost-sharing percentage of a metal tier.
While this isn’t technically an expense, it’s important to note that ACA-plans have what’s known as an out-of-pocket maximum. This means that once you pay a predetermined amount in healthcare expenses out-of-pocket, your insurance will begin to pay 100% of covered expenses. In 2023, the maximum out-of-pocket expense for an individual plan is $9,100, while the maximum for a family plan is $18,200.
The “Metal Tiers”
All plans sold on the Health Insurance Marketplace are placed into one of four coverage tiers established by the Affordable Care Act. You’ll most likely see these four categories referred to as “metal tiers” or “health coverage tiers.”
Don’t worry though, as we pointed out above, these metal tiers do not indicate differences in the quality of care you receive with these plans. These tiers only indicate how much of your healthcare costs you and your insurance company will be responsible for.
Plans were required by the ACA to begin classifying themselves in four actuarially determined categories: 60%, 70%, 80%, and 90%. This was done as part of the design process for the metal tiers and is meant to help you compare plans. Since these percentages indicate how much of your medical costs your insurance company will pay. Large group plans, such as those provided by an employer, are exempt from the tier requirements. But must have an actuarial value of at least 60%.
Remember, the cost of your plan always includes a number of factors. Like your monthly premiums, your annual deductible, copayments, and coinsurance. The metal tier you choose will dictate how much you pay for each of these. So let’s take a closer look at what this means for each metal tier.
Bronze plans have the lowest monthly premiums of any plan type, but that doesn’t mean they are the cheapest plans. You will be responsible for a lot more of your care out-of-pocket if you have a Bronze plan. With these plans, your insurance company will cover 60% of your medical expenses. So, you will be responsible for the remaining 40%. Additionally, annual deductibles (the amount you are responsible for paying before your insurance plan kicks in to cover medical expenses) for these plans can be in the thousands.
So who are these plans aimed at? If you don’t anticipate frequent use of medical services, but still want to be covered in case of something like a serious illness or injury, a Bronze plan may be a good fit for your budget. But the high deductibles and coinsurance of these plans mean that you’ll have to pay a hefty chunk of your bill for even minor medical care out-of-pocket.
Silver plans are the most moderately priced plans. With these plans, your premiums will be a bit higher than those of Bronze plans. But you will pay 30% of the total cost of your medical care out-of-pocket, and your insurance company will cover the remaining 70%. In addition, the deductibles for Silver plans are lower than they are for Bronze plans.
So, if you’re willing to pay a little more for your premiums than you would with a Bronze plan, but want more of your routine medical expenses covered. Silver plans are a great choice because of their lower deductibles.
Gold plans have higher premiums than either Bronze or Silver plans do. But you will pay less out-of-pocket for medical services. If you have a Gold plan, your insurance company will pay for up to 80% of your medical expenses. Meaning you will only have to pay for the remaining 20%.
This is the best plan for you if you know you’ll be needing a lot of medical attention. Because it provides more comprehensive coverage, as well as lower deductibles. The higher monthly premiums will balance out, once you add up what you would have to pay for out-of-pocket with a lower tier plan.
Platinum plans have the highest monthly premiums of any tier, but in exchange, they have the lowest deductibles and coinsurance. Your insurer will cover a whopping 90% of your medical bills with a Platinum plan. And you will only have to pay the remaining 10% out-of-pocket.
Just like with Gold plans, Platinum plans are a good option if you know you’ll be needing extensive medical care.
How Cost-Sharing Works
The term “cost sharing” is used to describe the splitting of healthcare expenses between you and your health insurance company. In fact, the name says it all. You share your medical costs with your insurer, like in the 30/70 split of a Silver plan. This means that you aren’t stuck paying for all of your medical bills on your own. But your insurer also expects that you cover a sometimes-significant portion of your care.
But, while the metal tier you choose will determine your cost-sharing percentage, your annual health care costs will be determined by the specific services you use and the specifics of your individual plan. For example, if you have a Bronze plan and you avoid all medical care for an entire year, only going in for an annual checkup. You will be responsible for less than 60% of your medical expenses for that year. However, if you get seriously ill and need surgery. You may end up paying for more than 60% of your care out-of-pocket.
How To Enroll
You can only enroll in an ACA metal tier plan during the period known as “Open Enrollment,”. Which begins on November 1 and ends on January 15 (in most states). During this time, you can also make changes to an existing plan. When you purchase a plan during the Open Enrollment Period, or OEP, your plan will go into effect on January 1 of the following calendar year.
Outside of the OEP, the only way to purchase or switch health plans is if you qualify for a Special Enrollment Period (SEP). You will need to experience a qualifying life event (QLE) in order to be eligible for one of these SEPs. QLEs include most significant transitions in your life, such as getting married, having a child, or changing careers.
EZ Can Help
Working with an EZ agent could mean saving hundreds of dollars on your premiums. Since we can search for plans both on and off the market for the best possible rates. Not only that, but we will also find any rebates for which you are eligible. And we won’t just help you find the best plan for you. We’ll also be here to support you after you make your purchase. For example, we’ll assist you in communicating with your insurance company regarding claims and policy renewals. To get started, simply enter your zip code in the box below. Or call one of our licensed agents at 877-670-3557.