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Do ‘Gold’ exchange plans offer more generous coverage than Bronze or Silver plans?

Q. I have read that the Gold plans sold in the exchanges  offer more generous coverage. What exactly does a Gold plan cover that isn’t covered by Bronze or Silver plans?

A. All plans (whether Bronze, Silver, Gold or Platinum) must cover the same essential benefits, including free preventive care; they all provide comprehensive coverage. This applies both inside and outside the exchanges.

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But plans with the lowest premiums (Bronze and Silver) require you to pay a larger share of your health costs. This typically means that your co-pays and deductibles will be higher, and your maximum out-of-pocket will generally be higher as well.

In 2016, all plans must have maximum out-of-pocket limits that don’t exceed $6,850 for an individual, or $13,700 for a family (an individual maximum out-of-pocket must be embedded in all family plans starting in 2016 as well). For 2017, the out-of-pocket maximum is increasing to $7,150 for an individual, and $14,300 for a family. But plans can have lower out-of-pocket limits, and that’s typically what you’ll see with Gold and Platinum plans.

How AV works

The distinction between the metal levels (Bronze, Silver, Gold, and Platinum) is based on the actuarial value (AV) of the plan. AV is calculated based on the average percentage of medical costs that the plan would pay, across all of its enrollees. That includes some enrollees who have barely any medical costs, as well as others who may run up millions of dollars in spending.

In the case of insureds with very high claims, the insurance company is obviously paying a huge percentage of their costs, since the bulk of the claim would be above the patient’s maximum out-of-pocket limit. But for insureds who have very low claims costs, the insured might be paying all or nearly all of the bill if the total cost is less than the deductible. So you can’t look at AV from an individual basis; it’s spread across a plan’s entire pool of insureds.

A Bronze plan has an AV of 60 percent, which means that the insurance company pays 60 percent of their insureds’ average costs. A Silver plan has an AV of 70 percent, a Gold plan has an AV of 80 percent, and a Platinum plan has an AV of 90 percent. Within those constraints, the actual plan design can vary considerably, so it’s possible to find a Gold plan that has a higher deductible than a Silver plan. But you can expect that your overall out-of-pocket costs throughout the year will generally be lower with a plan that’s higher up the metal level scale.

In most cases, Gold plans will have deductibles, copays, and prescription costs that are lower than Bronze or Silver plans. But again, it’s important to carefully compare each option, because the plans vary significantly from one carrier to another and from one region to another.

Cost-sharing subsidies can make silver better than gold

If you qualify for cost-sharing subsidies (ie, your income doesn’t exceed 250 percent of the poverty level; for 2016 coverage, that’s $60,625 for a family of four), pay particular attention to the Silver plans. The cost-sharing subsidies are baked into Silver plans for eligible enrollees, and they result in coverage that’s got higher AV than a typical Silver plan, and a lower maximum out-of-pocket than the general limits set by the ACA.

In many cases, cost-sharing subsidies result in Silver plans that are more robust than Gold plans.

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