Why do metal tiers matter when shopping for a Marketplace Plan?

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Choosing the best metal level (ie bronze, silver, gold or platinum) for your needs is critical when it comes to health insurance benefits and savings. Metal levels directly impacts your total healthcare costs throughout the year. To understand what this all means, let’s first define a few things.  First, a metal level: Depending on how many plans are offered in your area, you may find plans at any of the following – Bronze, Silver, Gold, and Platinum. There are different types of Catastrophic plans too.

  • Bronze: Bronze plans tend to have the lowest monthly premiums. Bronze plans must cover an average of 60% of all your covered out-of-pocket costs while you are responsible for the remaining 40%. Bronze plans qualify for Tax Credits or a Subsidy.
  • Silver: Silver plans tend to have the second lowest monthly premiums. Silver plans must cover an average of 70% of all your covered out-of-pocket costs while you are responsible for the remaining 30%. Silver plans qualify for both Tax Credits and Cost Sharing subsidies. These are the only types of plans to qualify for cost sharing reduction (we’ll get to that in a minute).
  • Gold: Gold plans tend to have the second highest monthly premiums. Gold plans must cover an average of 80% of all your covered out-of-pocket costs while you are responsible for the remaining 20%. Gold plans qualify for Tax Credits.
  • Platinum: Platinum plans tend to have the highest monthly premiums. Platinum plans must cover an average of 90% of all your covered out-of-pocket costs while you are responsible for the remaining 10%. Platinum plans qualify for Tax Credits.
  • Catastrophic coverage: Catastrophic health plans are the least expensive plans you can get that count as minimum essential benefits ensuring you avoid the fine. If you are under 30 or obtained a “hardship exemption” you qualify for high deductible, low premium, catastrophic plans. These have extremely high out-of-pocket costs.

How do subsidies and Cost Sharing Reduction effect metal levels?

You may qualify for support to help lower your healthcare costs, including a subsidy or cost sharing reduction (CSR).  A subsidy is a type of financial help that you may qualify for that reduces your monthly payment (or premium) as soon as your coverage begins.  And, Cost Sharing Reduction provides a discount that lowers the amount you have to pay for deductibles, coinsurance, and copayments. This is based on your income and can only be applied to Silver plans.

What does all of this mean?

Individuals and families eligible for cost sharing reduction will likely want to pick a silver plan as they will see a drastic reduction in the overall costs of healthcare over the course of the year even with a slightly higher monthly premium. To help bring this idea to life, below there are four graphs that represent four different families living in Hillsborough County, Florida. The families are all very similar with two parents in their mid-30s, and three kids. The only key difference is the family’s household income level.  Only the parents are applying for coverage, and they are comparing costs of four UnitedHealthcare plans, one of each metal level.

Family A: Their yearly income is $30,000, and they are quoted a subsidy of $482/month

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Dark blue columns = the yearly cost, this is calculated by multiplying the quoted monthly premium by 12 months

Light blue columns = the deductible, this is the amount you have to pay before your health insurance starts covering the percentage mentioned at the beginning of this post

Green columns = the out-of-pocket maximum, this is the maximum amount you will have to pay out-of-pocket. Once this is reached, your insurance company should start covering 100% of costs within network.

For Family A, you’ll notice that the yearly cost for the bronze plan is $0. Meaning that as long as the family has no bad accidents or medical issues, their health insurance for the year will be very affordable. However, notice the deductible alone is about $6,000! If something were to happen, the family would suddenly have very high healthcare costs.

In comparison to this, notice how much lower the silver plan appears. This is the effect of cost-sharing reduction. It illustrates the lowered deductible and out-of-pocket maximum in the silver plan only.

Family B: Their yearly income is $40,000, and they are quoted a subsidy of $412/month

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Notice that for Family B, the silver plan still has a significantly lower deductible and out-of-pocket maximum. Again, although the bronze plan has the lowest yearly cost, the deductible and out-of-pocket maximum are way higher than the rest. If something serious were to happen, Family B would also have very high medical costs ahead of them.

Family C: Their yearly income is $50,000, and they are quoted a subsidy of $309/month

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For Family C, you’ll now notice that the silver plan is starting to even out with the gold and platinum plans. Cost-sharing reduction is still apparent, just not as much as before.

Family D: Their yearly income is $60,000, and they are quoted a subsidy of $191/month

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The plans are starting to even out a little more for Family D. At this point, it may be good to put more weight on other factors, as well as income.

We’ve now reviewed metal levels, and have explored the large effect that income can make on the plans available to you and your family. If you have any further questions about this, you can always reach out to our HealthSherpa consumer support team!

HealthSherpa Pro Tip: If you are eligible for cost-sharing reduction, you have the option to filter for cost-sharing reduction benefits. You can find this at the ‘Sort by’ function on the left side of the screen, when you are viewing all of the plans available in your area.

Sources:

  1. All quoted subsidies for the four families come from 2015 HealthSherpa quotes.