Coverage Tiers

Four Tiers of Coverage

The health insurance exchanges will offer four tiers of coverage options - platinum, gold, sliver, and bronze - often referred to as the metals plans for obvious reasons. These options are based on the percentage of full actuarial value of benefits the plan is designed to provide, and are as follows: platinum 90%, gold 80%, sliver 70%, and bronze 60%.

What is Actuarial Value

Actuarial values are estimates of how much the insurance plan will pay of an average person's medical expenses. For example, if an average person expects to have $10,000 in medical expenses, a plan that pays $7,500 of those expenses (after premiums, co-pays and deductibles) has an actuarial value of 75 percent. This means that the higher the actuarial value covered by the plan, the higher the premium will be, but lower out-of-pocket costs will be charged to the consumer. For example, someone enrolled in a platinum plan will pay higher premiums because the out-of-pocket expenses and cost
sharing will be much lower. On the other hand, for the bronze plan, the premiums will be much lower because the out of pocket expenses and cost sharing will be much higher. After the exchanges are up and running, you will need to understand these different levels of coverage to identify which level best suits your needs.

Catastrophic Plan

Exchanges may also offer one additional level of coverage. This is referred to as a catastrophic plan. The catastrophic plan can be offered only in the individual market and only for young adults, those under age 30 before the plan year begins.

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