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The Metal Levels of ObamaCare Health Plans and What They Mean

Although Obamacare insurance plans must provide the essential health benefits required by the Affordable Care Act, there are significant differences between plans, designated by metal levels which represent their actuarial value. The metallic designations are bronze, silver, gold, and platinum. 

The basic minimal services which a health plan must cover, also known as essential health benefits, as mandated by the Affordable Care Act, include doctor visits, other outpatient care such as day surgery, hospital care, emergency services, prescription drugs, maternity care, mental health care, substance abuse services, rehabilitation, laboratory tests, pediatric services, and preventive or wellness services. 

The actuarial value is the share of covered health insurance expenses which a particular plan will pay, and is determined by statistical analyses and calculations based on the average use of health insurance by a particular group of enrollees. Groups are defined by age, geographic location, smoking status and some other variables.  

The actuarial value or the percentage of covered medical expenses paid by insurance companies, increases from bronze-level plans to platinum-level ones as follows: Bronze level plans generally cover 60% of medical expenses. Silver-level plans cover 70% of expenses, gold-level plans cover 80% and platinum level plans cover 90%. Conversely, the percentage of covered expenses that enrollees have to pay in the form of copayment, deductibles and coinsurance, is highest for the bronze-level and lowest for the platinum-level plans as follows. Those expenses, also known as out-of-pocket expenses are 40%, 30%, 20%, and 10% for the bronze, silver, gold and platinum plans respectively. 

There is an inverse relationship between the metallic plan level and the cost of premiums because of the decreased out-of-pocket expenses incurred with the higher-level plans. Therefore, premiums are higher for the platinum level plans and lower for gold, silver, and bronze in that order. 

Although all Obamacare health plans must provide essential health benefits, each state has the flexibility to designate a benchmark plan, which is the standard or model plan that others must measure up to in order to be sold through its health insurance exchange. The model plan is based on a typical plan offered by a large employer in that state.  The actual benefits covered by each plan in that state must at least match those of the benchmark plan in order to be sold on that state’s exchange or marketplace. The deductibles, coinsurance and copayments may be different between insurance companies or between plans offered by the same insurance carrier within a state’s exchange, as reflected by different plan metallic levels. 

The benchmark health insurance plan as it relates to the eligibility of a plan to be sold on a state’s exchange or marketplace should not be confused with the benchmark health plan on which the Affordable Care Act health insurance subsidies, also known as premium tax credits, is based. The benchmark plan on which that calculation is made is the second cheapest silver-level plan which is being sold on the health insurance exchange in a given state. 

Evaluating and comparing Obamacare health plans via an online health insurance marketplace platform with special attention to their metallic designations is an efficient way of distinguishing plans, and essentially is tantamount to exploring the newest metal market.

Victor E. Battles, M.D. is a board-certified internist with 30 + years of patient contact. He has been a principal investigator in several clinical research trials and is the founder of Proactive Health Outlet. Additionally, he has worked in the areas of quality assurance and utilization review.

Victor E. Battles, M.D.
December 7, 2013

Compare metal plans and find Affordable Care Act health insurance here! 


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