Sorting through health insurance to find the right plan for you can feel like a daunting task. When shopping for insurance related to the Affordable Care Act (ACA), however, it’s possible to simplify things a little by understanding the “metal levels.”
ACA plans are divided into tiers. Once you get the hang of them, they make a little more sense. Here’s what you need to know as you look for your next health plan.
What do the ACA Metal Levels Mean?
There are four metal levels with ACA plans — bronze, silver, gold, and platinum. However, they don’t refer to the quality of care you receive. Instead, the level you choose is all about how you and the insurance company split the cost of your care.1 Additionally, all these levels include certain essential services, such as some preventative care, at no extra cost.
With a bronze plan, for example, you’ll pay a lower monthly premium but you can expect to pay a higher portion of the cost when you go in for care. At the highest level, platinum, you’ll have a higher monthly premium, but when you receive healthcare, you’ll pay a lower percentage of the cost.
Additionally, your deductible, or the amount you pay before the insurance company starts paying anything, depends on the ACA metal level. Bronze has the highest deductible, while Platinum has the lowest. Silver and gold plans have ones that range between the two.
No matter which type of plan you choose, it’s possible to reduce your total cost if you qualify for a premium tax credit.2 This tax credit, or subsidy, is based on your income. When you complete your marketplace application, you can see what you qualify for — and how much you can save on your premiums if eligible.
How Cost Sharing Works at Different ACA Metal Levels
It’s important to understand that premium costs vary for insurance plans. Costs depend on where you live, the coverage you choose and other factors. There isn’t one price for each plan at a specific level. However, you can get a feel for what you might pay by looking at how the cost-sharing works at the different ACA metal levels.
|Metal Level||What the insurance company pays||What you pay|
It’s important to realize that this cost split only takes effect after you’ve met your deductible, and as long as you pay your premiums.
For example, let’s say you get a gold plan with a premium of $400 per month and an annual deductible of $500. You’ll have to pay your premium each month, and when you receive certain healthcare services, you’ll have to pay 100% of your bill until you’ve spent $500. Once your total out-of-pocket costs for care reach that deductible threshold, your insurance company will pay its agreed-upon share. On the gold plan, that means the insurance company will pay 80% of your healthcare costs while you pay 20%.
Which Tier is Right for Me?
Deciding which of the ACA metal tiers is the right choice for you depends on your individual situation and healthcare needs. Pay attention to the trade-offs between premiums, deductibles and coverage. While it may seem like the lowest premium is the best choice, if you have a lot of healthcare needs, the high deductible that often comes with it can actually make things cost you more in the end.
Here are some things to consider as you decide which metal tier is the best choice for you.
- Lower monthly premiums
- Higher deductibles
- You pay a larger share (40%) of costs
A bronze plan can make sense if your regular healthcare needs are relatively few. You’ll save money each month on premiums. However, the higher deductible could mean that you never reach it, and you’ll pay for most of your healthcare out of your own pocket. This level can work if you don’t often need care, and you just want some level of protection in the event of a major illness or injury.
- Moderate monthly premium
- A lower deductible that is easier to meet than with a bronze plan
- Your share of costs for services is lower (30%) than with a bronze plan
One of the advantages of a silver plan is that it can be a good choice if you qualify for what are known as “extra savings.3” In order to take advantage of these cost-sharing reductions, you must enroll in a silver plan. Use the government’s calculator to see if you’re eligible. If you are, you could save thousands of dollars a year.
The silver plan can also be a good choice for those who can afford to pay a little more in premiums each month and think they may meet the deductible.
- Higher monthly premium
- Relatively-low deductible
- Lower share of costs (20%)
For those who use more healthcare throughout the year, a gold plan can make sense. With a gold plan, you’ll pay more each month, but it won’t take as long to meet your deductible. So a greater portion of your costs will be covered. If you have regular prescriptions or if you know you’ll have to make multiple doctor visits each year, a gold plan may merit the higher premium cost.
- High monthly premium
- Low deductible
- Lowest share of costs (10%)
If you have a lot of recurring healthcare needs, consider choosing a platinum plan. You’ll end up paying more each month in premiums, but you’ll meet your deductible sooner and the insurance company will pay a greater share of your costs. With a platinum plan, you’ll have a higher fixed cost each month, but when you receive services, you won’t have to pay as much.
Where Do Catastrophic Plans Fit In?
Another possibility is to use a catastrophic plan to cover your healthcare costs.4 These plans have very low premiums but come with higher deductibles. On top of that, if you get a catastrophic plan, you can’t claim a premium tax credit.
In order to qualify for a catastrophic plan, you must meet at least one of two criteria:
- Be under the age of 30
- Qualify for a hardship or affordability exemption (no matter your age)
Those most likely to benefit from this type of plan don’t qualify for a premium tax credit and have very few healthcare needs. This plan would cover you in the event of a major illness or injury. It also includes preventative healthcare and primary care visits. For other services, though, you’d have to meet the high deductible threshold before the insurance company would pay toward your costs.
Your costs will vary, depending on where you live and the coverage you get. Review your basic healthcare needs and determine which ACA metal level best fits your needs. You can also see what type of premium tax credit you can receive. When you shop around, keep in mind that the premium presented to you is the cost without your subsidy. If you qualify for a tax credit, your cost may be lower than what’s displayed.
By understanding the ACA metal levels, you’ll have an idea of where to start as you shop around, and you’ll be able to make a more informed decision about your health care.