The Affordable Care Act set out to standardize small-group and individual health insurance policies by creating a “metal” ranking for policies, with each level based on actuarial value. All new small group and individual market health insurance plans — including plans sold in the exchange as well as plans sold outside the exchange — must fall into one of the metal levels (unless it’s a catastrophic plan in the individual market).
With a Bronze plan, the plan members pay roughly 40 percent of costs. That drops to 30 percent on a Silver plan, 20 percent on a Gold plan and 10 percent on a Platinum plan.
But these percentages apply to an entire standard population — they aren’t applicable to specific individuals who have coverage under the plan. People with very low overall healthcare spending will typically pay a larger share of their own costs (since they won’t have met the plan’s deductible yet), while a person with exorbitant health care costs during the year might pay only a tiny fraction of the total costs, while the health plan pays the vast majority of the total. And a person who is healthy enough to only need preventive care during the year might end up with 100 percent of her health care costs covered by the plan, regardless of what metal level she has, since specific preventive care is covered with no out-of-pocket costs regardless of the metal level.
So across a standard population, bronze plans pay an average of 60 percent of costs, silver plans pay an average of 70 percent, gold plans pay an average of 80 percent, and platinum plans pay an average of 90 percent (these percentages are referred to as actuarial value) But it would be too challenging to hit those targets exactly, so insurers are allowed to use a de minimus range instead. Through 2017, it was +/-2 percentage points, which meant that bronze plans had actuarial value in the range of 58-62 percent, silver plans in the range of 68-72 percent, and so on. But as of 2018, the allowable actuarial value range for each metal level expanded, under rules laid out in the 2018 Benefit and Payment Parameters and the market stabilization rule that was published in April 2017. Metal level plans now have the following actuarial value ranges:
- Bronze: 56-62 percent
- Expanded Bronze: 56-65 percent
- Silver: 66-72 percent
- Gold: 76-82 percent
- Platinum: 86-92 percent
Regardless of the metal level, no ACA-compliant plans can have out-of-pocket maximums that exceed $8,150 and $16,300 in 2020 (these amounts will increase to $8,550 and $17,300 in 2021). All ACA-compliant individual and small group plans (sold in the exchange or outside the exchange) must fall into one of the metal level ranges, with the exception of catastrophic plans, which are only available to some enrollees in the individual market, and which must have an actuarial value of less than 60 percent.
Both on-exchange and off-exchange, metal-level plans are available for purchase during the annual open enrollment period for the individual market, which runs from November 1 to December 15 in most states. In the small group market, employers can set their own open enrollment windows for their employees, although employers can purchase a plan for their business at any point during the year.