Ever wonder why insurance policies are labeled bronze, silver, gold, or platinum and what these different plans mean?
Wonder no more. Jeff Hess, individual, group, and ancillary health expert, explains these metal plans in the video below. Watch now!
We have metal plans: bronze, silver, gold, platinum, and of course you have your catastrophic. Now you hear these, but what do they actually mean? The bronze plan is the lowest level of coverage; that is what they call an actuarial value of 60%. The silver is a 70% actuarial value of coverage. Gold is 80% actuarial value, and the platinum is a 90% actuarial value. What does all that mean? Basically, what this means is that the bronze plan typically takes into account – on the spectrum of everybody – the average cost that the policyholder would spend on their health coverage minus their premium. With the bronze plan, the insurance company is going to pay 60% of everything, of the expense, and 40% would be from the policyholder. As for the silver plan, which is a 70% actuarial value plan, the insurance company covers 70% of the average cost for everyone out there with a silver plan so that the policyholder would only be responsible for 30% up until they meet their out-of-pocket maximums and so on and so forth when it comes to the higher plans.
Now the catastrophic plan is probably the cheapest plan out there. However, it has a lot of strings, even more so than the others. Typically, in order to get a catastrophic plan you have to be 30 or younger or have experienced some sort of hardship. The list of hardships are on healthcare.gov, or you can talk to your agent, who should have a list as well. It’s a very long and extensive list – and quite eclectic – including issues like paying your utility bills and having your power shut off, which would exempt you from having to have one of the metal plans and would qualify you for a catastrophic plan.
So you’ll hear a lot of the insurance talk about bronze, silver, etc… it’s just a way to identify good, better, best, awesome. Ultimately, they use the precious metals to scale the plans accordingly. The bronze is the most out-of-pocket compared to a platinum plan; that’s what that means.
Since insurance is oftentimes overwhelmingly confusing, we want to shed light on this industry by answering YOUR questions. So if you have any questions or concerns, comment below and your question may be the topic of our next video!