What Are the Metal Tiers in Health Insurance
All health insurance plans in the market disseminate into four categories: bronze, silver, gold, and platinum. The difference in tiers from the lowest to the highest responds to the different expenses your health insurance plan can share.
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As the economic world evolves, health risks create higher threats to productivity. That is why having health insurance coverage for you and your family is crucial. Although not all companies provide coverage for their employees, health insurance has become more affordable to individuals thanks to the Affordable Care Act (ACA).
Insurance premiums differ per person based on various factors such as age, geography, or the plan you or your employer enroll in. The USA records an annual cost of health insurance at $7,470 for an individual and $21,342 for a family. With the metal tier system, which categorizes healthcare plans by premium rates and cost-sharing rules, you have an option to choose the one that suits your needs.
This article discusses the different types of metal tiers in the market, who qualifies for each, and their differences.
What is Health insurance?
Health insurance is a contract where an insurer pays for health expenses in exchange for premiums. It is often included in an employer's benefits package to encourage employees. Hence, your employer covers these premiums partly, and some are deducted from your paycheck.
The Affordable Care Act (ACA) allows those who do not get health coverage from an employer to get it. ACA forms standard criteria for marketplace health plans. It makes comparisons easier for consumers. Provisions of the ACA prohibit Health Insurance companies from denying an applicant cover based on preexisting health conditions.
Metal Tiers in Health Insurance
All health insurance plans in the market disseminate into four categories: bronze, silver, gold, and platinum. The difference in tiers from the lowest to the highest responds to the different expenses your health insurance plan can share.
Metal tiers do not dictate the level of care you will receive. All health insurance tiers should cover the exact 10 Essential Health Benefits, which include:
Emergency services
Ambulatory or outpatient medical services. These are the services you receive without hospital admission.
Pregnancy, maternity, and newborn care both before and after birth
Hospitalization like surgeries and admissions
Prescription drugs
Mental health and substance use disorder services. They include corrections and behavioral health treatment.
Laboratory services.
Pediatric services but adult dental and vision coverage aren't essential health benefits.
Preventive, wellness service, and chronic disease management
Services like rehabilitation and devices help people to recover from injuries or long-term conditions.
Higher premiums come with lower annual deductibles. Plans with lower premiums tend to go with high deductibles. So, you can analyze your annual expenditure in health and come up with the most suitable plan. All marketplace health plans must offer a set of preventive care services without a copayment.
How Metal Tiers Work
We will begin from the least expensive to the top.
Bronze
The bronze tier is the cheapest of the categories. It is inexpensive because they cost minimal monthly premiums. But remember, cheap is expensive because you will have to pay high off-pocket costs when needing medical attention. The bronze plan may take a while to mature and cost you high deductibles before it starts paying off. Even so, they are the best choice for a person who wants a low-cost way to protect themselves from unexpected illnesses.
Now that the monthly premiums are low, you are subject to paying for most routine care for yourself. For example, the insurance company pays 60% in bronze plans, and you pay 40%.
Silver
The silver tier is cheap but a bit higher than the bronze tier. The rates under this category are moderate. They create a balance in your expenditure and insurance expenditure. It is the most common choice among marketplace shoppers. The moderation of services and costs makes it a more acceptable plan. You pay reasonable monthly premiums and moderate costs when you need to access affordable care.
It can save you lots of money if you qualify for cost-sharing reductions. Here you can save a lot on deductibles, coinsurance, and copayments when you need care. Here, the insurance company pays 70% while you pay 30%.
Gold
The gold plan stands in third place as we ascend the hierarchy of metal tiers. Gold plans usually have higher monthly premiums but lower costs when you get care. So, the deductibles are usually low.
It is a perfect plan if you are a person who needs regular medical care. You are willing to pay more monthly dues to have most costs covered when you'll need care. The insurance company pays 80% in the gold tier, and you pay as low as 20%.
Platinum
Platinum plans play at the top of the charts. They are expensive because of very high monthly premiums. Deductibles, in this case, are very low, which means your shares start to pay off sooner than other tiers. The platinum plan is suitable for people who require frequent and/or expensive medical care. Here you pay high monthly premiums, covering all additional costs. Platinum plans have your insurance company paying more than 90% of medical care costs, and you pay less than 10%.
Catastrophic Coverage
This category is not in the hierarchy because it is a special patch. It is the point when you reach your total drug prescription yearly deductibles. This tier is only applicable to people under 30 years and has a record of hardships.
Catastrophic plans have very low premiums but very high deductibles. You will have to pay out-of-pocket for most of your care till you meet the deductible. These plans cover a certain amount of preventable care without charges and cover all ten essential health benefits.
Metal Tier Cost Sharing
A metal tier cost-sharing is the total average costs that an insurer will pay for covered services and benefits over the year. Hence, the actual cost that you pay depends on the yearly health care service you are using and your plan details.
If you use a silver plan in a year and go to the doctor for a checkup, it will cost you less than 70%. But, if you are engaging in surgical procedures, the cost would exceed 70%. These percentages are known as actuarial values.
How Do Actuarial Values Work
Insurance companies calculate actuarial values by merging all consumer costs. Thus, actuarial values for a plan are the amount the insured will pay. Your actual spending will vary by plan and by the services you use.
There are five major costs you pay depending on the plan you intend to access. Make sure you check and understand the details of your insurance plan. The costs are:
Premiums. These are the monthly payments to maintain the insurance coverage in your plan. Plans with lower premiums make you pay high out-of-pocket costs.
Deductibles refer to the amount you need to pay in out-of-pocket expenses before your insurer takes over.
Copays refer to a flat fee you pay from your pockets to receive health services. These fees depend on the plan you use.
Coinsurances. Your insurance won't cover the total cost of care even after hitting your deductibles. You will have to pay a certain percentage of the remaining expenses for your insurer to step in. That percentage is the coinsurance.
The out-of-pocket maximum. Once you hit a certain threshold of health care costs, your insurer takes over for the rest of the year.
Conclusion
Understanding the magnitude of healthcare services you need will help you decide on a suitable health insurance plan. The variation of plans gives flexibility for everyone to access a health insurance plan.
If you need information or help in understanding the best plan for you, PolicyScout is the best stop.