There will be four basic levels of coverage: platinum, gold, silver and bronze offered by insurance companies in the open private market and on the Public Exchange. All four levels of coverage will include the ten essential benefits mandated in the Affordable Care Act. This ranking system will make it easy to compare plans in the same category or across categories. As the metal category increases in value, so does the percent of medical expenses that a health insurance company plan will cover. The actuarial values for each of the for categories are as follows
Platinum Plan Level actuarial value 88% – 92%
Gold Plan Level actuarial value 78% – 82%
Silver Plan Level actuarial value 66% – 72%
Bronze Plan Level actuarial value 58% – 62%
The actuarial value simply means, for example in the Silver Plan the insurance company will pay on average 70% of the medical expenses of the enrolled population and the member will pay 30% in the forms of co-payments, coinsurance and deductibles. The health plans that cover more of the individuals medical expenses require a higher monthly premium. The consumer can choose to pay a higher monthly premium so that when they need medical care, they pay less. Or the individual can choose to pay a lower monthly premium so that when they need medical care, they pay more. An individual can choose the level of coverage that best meets their medical care needs and budget.
Besides the bronze, silver, gold and platinum plans, health insurance companies can offer a catastrophic plan, which will pay for a lower percentage of costs than the bronze plan. Catastrophic plans will carry lower premiums than the bronze, silver, gold or platinum plans, but will have higher out-of-pocket costs for medical care. Catastrophic plans will be available only for people under age 30 and people who are exempt from the individual mandate because the cost of a standardized health insurance plan would exceed 8 percent of their income.