Understanding Metal Levels and Marketplace Insurance
It’s never too soon to start preparing for the annual Open Enrollment Period. If you’re ready to shop the Health Insurance Marketplace, but not sure of what plan is best for you, we’ve got your first step. Start by understanding the various differences in the metal levels of Marketplace health insurance. Thanks to the Affordable Care Act (ACA), there are Bronze, Silver, Gold and Platinum plans available. Each offer different ratios of what you’ll pay and what your health plan will pay for your care. This translates to different levels of monthly premiums versus out-of-pocket costs when you use your plan. And different metal levels also potentially qualify you for different kinds of Marketplace subsidies. Once you understand the metal levels, you’ll be one step closer to picking the best Obamacare plan for you.
— Before we get started, make sure to download our FREE guide. Save to your computer and refer back to later when choosing a new plan. —
What are metal levels in Marketplace health insurance?
Before you shop the Marketplace, your first question may be which metal level of health coverage is right for you. All health insurance plans in the Marketplace are broken into four metal-level tiers: Platinum, Gold, Silver, and Bronze. These metal levels only reflect the differences in how costs for your healthcare are split between you and your insurance company. Generally speaking, plans with higher premiums have lower annual deductibles. And plans with lower monthly premiums tend to come with high deductibles. Depending on your annual medical costs, different metal levels will offer different kinds of value to you.
The different metal tiers in no way reflect a difference in the level of care you receive.
Thanks to the Affordable Care Act, all Marketplace plans must cover the following 10 categories of Essential Health Benefits:
- Ambulatory patient services (outpatient care you get without being admitted to a hospital)
- Emergency services
- Hospitalization (like surgery and overnight stays)
- Pregnancy, maternity, and newborn care (both before and after birth)
- Mental health and substance use disorder services, including behavioral health treatment (this includes counseling and psychotherapy)
- Prescription drugs
- Rehabilitative and habilitative services and devices (services and devices to help people with injuries, disabilities, or chronic conditions gain or recover mental and physical skills)
- Laboratory services
- Preventive and wellness services and chronic disease management
- Pediatric services, including oral and vision care (but adult dental and vision coverage aren’t essential health benefits)
Remember that no matter which plan type you select, all Marketplace plans are what’s known as Qualified Health Plans. And these plans must offer a set of preventive care services with no copayments.
What is the difference between each metal level?
On the whole, the metal tiers work as follows:
On average, Bronze plans pay for 60 percent of covered healthcare costs, leaving consumers to pay for 40 percent of their medical expenses.
As a result, they have the lowest monthly premiums of all metal tiers. But Bronze plans ultimately leave you with the highest costs when you need care. They also typically have the highest annual deductibles. With Bronze plans, you might need to pay several thousand dollars out-of-pocket before your real cost savings kicks in. Bronze plans are best for those looking for the most cost efficient way to get coverage. However, they leave consumers with the risk of facing steep bills should you need to access any major medical care.
On average, Silver plans pay for 70 percent of covered healthcare costs, leaving consumers to pay for 30 percent of their medical expenses.
Silver plans typically have moderate monthly premiums and present consumers with moderate costs when they need care. With a Silver plan, you annual deductible will be lower than that of a Bronze plan. One of the most important aspects of Silver plans is that if you qualify for cost-sharing reductions based on your income level and family size, Silver plans are the only plans where you can apply these extra savings that further reduce your costs. If you qualify for cost-sharing reductions and choose a Silver plan, you could end up saving thousands of dollars a year should you need to access lots of healthcare services. So, if you think you’ll end up using your health plan a lot and qualify for cost-sharing reductions, it makes a lot of sense to choose a Silver plan, with its slightly higher monthly premiums, over a Bronze plan.
On average, Gold plans pay for 80 percent of covered healthcare costs, leaving consumers to pay for 20 percent of their medical expenses.
Gold plans have high monthly premiums, but low costs when you actually access healthcare. They typically have very low deductibles. This means, your plan will start paying for its maximum portion of your healthcare costs sooner. Which also means you’ll start seeing savings sooner, too, if you access a lot of care in a given year. If you know you’re going to use a lot of care and can afford to pay a high monthly premium, you’ll get the most value out of a Gold plan.
On average, Platinum plans pay for 90 percent of covered healthcare costs, leaving consumers to pay for 10 percent of their medical expenses.
Platinum pans have the highest monthly premiums, and the lowest cost to you when you actually access care. They also have the lowest annual deductibles of all the metal tiers. This means, a Platinum plan’s true cost savings kicks in the fastest if you are accessing lots of care. If you use a lot of healthcare services and can afford the high costs of your monthly premiums, a Platinum plan may be the best fit.
Certain people might also be eligible for and interested in what’s known as a Catastrophic health plan. A Catastrophic plan has very low monthly premiums and a very high annual deductible. These plans offer people who don’t access healthcare very often a way to protect themselves against a worst-case scenario. With a Catastrophic plan, you’ll have to pay for the majority of care yourself out-of-pocket, but you will have some protections if you face a major illness or injury and need more intensive levels of care.
Catastrophic plans: an overview
Catastrophic plans have the same essential health benefits as other Marketplace plans. Like other Marketplace plans, they also must cover certain preventive health services at no cost. These plans also cover three primary care visits a year before you meet your deductible. Otherwise, all other care typically you will pay for out-of-pocket until you meet your deductible. In 2019, the deductible for all Catastrophic plans was $7,900. After you meet that deductible, your Catastrophic plan will pay for all covered care, with no additional copays or coinsurance. Keep in mind that you can’t use a premium tax credit towards a Catastrophic plan. If you qualify for a premium tax credit or cost-sharing reductions, you will likely get more value out of a Bronze or Silver plan.
Catastrophic plans: who qualifies
Not everyone is eligible for a Catastrophic plan, too. They are only available to people under the age of 30, or those who qualify for a hardship or affordability exemption. If you qualify for a Catastrophic plan, it will be presented to you as one of your options when you complete an application for Marketplace insurance either through HealthSherpa or HealthCare.gov.
Keep in mind that your health insurance pays for the bulk of your covered medical costs after you’ve met your annual deductible, regardless of the plan you choose. This means that if you are facing a stack of high medical bills, you’ll ultimately get more value out of a plan that pays for more care, even if you’re paying higher premiums.
What is the average cost for health insurance based on metal levels?
In 2019, the national average lowest monthly premium cost for each of the four metal tier plans was as follows:
Bronze: $339 / mo
Silver: $452 / mo
Gold: $514 / mo
Platinum: $709 / mo
How do subsidies affect metal levels?
The name says it all. One of the chief goals of the Affordable Care Act is making health insurance affordable for more people. That’s why there are two main ways of lowering costs available to low- and mid-income people who buy Marketplace insurance.
Premium tax credit
The first is what’s known as a premium tax credit. The premium tax credit lowers the amount a person pays for their monthly premiums. To receive the premium tax credit, you must purchase Marketplace insurance. (And a reminder that you can do this both through HealthCare.gov or a federal partner like HealthSherpa.) When a person applies for a Marketplace health plan, they will automatically find out if they qualify for a premium tax credit, and how much it will reduce their monthly premiums. If you qualify for a premium tax credit, you may choose to either have it applied directly to your premiums each month. Or, you may choose to receive it as a lump sum tax credit at the end of the year.
You might be eligible for a premium tax credit for your Marketplace health insurance if you meet the following requirements:
- Have a household income from one to four times the Federal Poverty Level (FPL), which for the 2019 benefit year will be determined based on 2018 poverty guidelines (In 2019, the subsidy range in the continental U.S. is from $12,140 for an individual and $25,100 for a family of four at 100% FPL, to $48,560 for an individual and $100,400 for a family of four at 400% FPL.)
- Not have access to affordable coverage through an employer (including a family member’s employer)
- Not eligible for coverage through Medicare, Medicaid, the Children’s Health Insurance Program (CHIP), or other forms of public assistance
- Have U.S. citizenship or proof of legal residency (Lawfully present immigrants whose household income is below 100% FPL and are not otherwise eligible for Medicaid are eligible for tax subsidies through the Marketplace if they meet all other eligibility requirements.)
- If married, must file taxes jointly in order to qualify
Cost sharing subsidies
Cost-sharing subsidies reduce a person’s out-of-pocket healthcare costs. This means that when you use your health plan, you’ll end up paying less for your deductibles, copays, and coinsurance amounts. And lowering annual deductibles, copays, and coinsurance amounts translates into real cost savings. They are available to those with household incomes between 100 – 250% of the Federal Poverty Line. In other words, they are available to the lowest income individuals who already qualify for premium tax credits.
Cost-sharing subsidies only apply to Silver-level plans. As a result of the way the reduce consumer’s costs, they can end up being close in value to a Gold or even Platinum plan. If you are eligible for cost-sharing subsidies and choose a Silver-level plan, you will be enrolled in a plan that has the cost-sharing subsidy automatically applied to it. In other words, your selected Silver plan will already have a lower out-of-pocket maximum, for example, than the same plan without the applied cost-sharing subsidy.
Thanks to the Affordable Care Act, Marketplace insurance comes in various Metal levels. And different levels offer different ratios of monthly premiums to out-of-pocket expenses when you use your care. Combined with the subsidies like premium tax credits and cost-sharing subsidies, Marketplace insurance was designed to make getting covered affordable and accessible to everyone. If you’re ready to learn more, and enroll in a Marketplace plan, the HealthSherpa Consumer Advocate Team is here to help at 855.772.2663.
Originally published on March 22, 2017.