Understanding the Four Tiers of the Health Insurance Plans

People who are not covered through employer-sponsored health plans need to purchase health plans either through the exchange or through the participating private insurance carriers. Individuals and family health insurance plans available in the US health insurance market are categorized into four metal tiers, bronze, silver, gold, and platinum. Each metal tier is different in terms of how the cost of healthcare services is divided between the insured and their insurer. Nevertheless, it is significant to know that these tiers have nothing to do with the quality of healthcare that people receive, as all the plans available have to cover the same ten essential health benefits and policyholders have access to the same network of doctors irrespective of the tier of their plans. The metal tier only tells how the healthcare cost is divided among the insured and the insurance carrier.

Difference Between Metal Tiers

Each metal tier is different in terms of how health insurance companies split healthcare costs between themselves and the consumers. Since the high cost of medical care is divided among the insurer and the insured, it helps both to afford the healthcare cost. The splitting of healthcare costs means that if an individual chooses a bronze plan, then he will be liable to pay about 40% of his healthcare cost including all premiums, deductibles, coinsurance and co-pays and the remaining 60% of the medical cost will be paid by his insurance carrier. Similarly if one chooses a Gold Plan then he will pay 20% of his medical cost including all premiums, deductibles, coinsurance, and co-pays and the remaining 80% cost will be paid by the insurance company. Here it is important to know that silver plans are a little bit different. Depending upon their income some individuals might be eligible for a cost-sharing reduction subsidy. Due to this subsidy individuals can qualify for a silver plan covering about 73, 87 or 94% of their healthcare costs.

The below table list the average cost-sharing breakdown that will be paid by consumers and insurers:

Metal Tier Consumer Pays Insurer Pays
Bronze 40.00% 60.00%
Silver 30.00% 70.00%
Gold 20.00% 80.00%
Platinum 10.00% 90.00%

Payments and Out-of-pocket Costs in Each Metal Tier

Health plans categorized under metal tiers also come with a different monthly premium and out-of-pocket costs like deductibles and co-pays.

Bronze Plans – Health plans that come under the Bronze tier have a lower monthly premium but have higher out-of-pocket costs.

Silver Plans – Health plans under the Silver tier come with a monthly premium, which is higher than bronze and lower than a gold plan. Besides, insured also have lower out-of-pocket costs than a bronze plan, but higher out-of-pocket costs than a gold plan, unless insured are eligible for a cost-sharing reduction.

Gold Plans – Health plans that fall under gold metal tier have higher monthly payments, but lower out-of-pocket costs.

Platinum Plans – Platinum category health plans have the highest monthly premium and lowest out-of-pocket costs.

Guide to Choose a Metal Tier Plan

Bronze Plans – Bronze plans are best for people who generally do not need or use healthcare much. People who just go for a yearly doctor’s checkup and occasionally require some prescription coverage and need just the minimum coverage to prevent them from bankruptcy in case of a medical emergency will find Bronze plan perfect. The benefit of a bronze plan is that it is cheaper, as this plan has the lowest monthly premium but the negative side of this plan is that apart from preventive care, all healthcare will cost full price for the insured.

Silver Plans – Silver plans are best for individuals who use healthcare more than just preventive care. They might not have any major medical requirements where they need to regularly visit a doctor to control their disease or have to undergo surgery. The Silver plans come with a lower deductible and maximum out-of-pocket maximum compared to the Bronze plan and usually cover all prescription drugs and doctor’s appointment costs.

Gold Plans – Though expensive but gold tier plans are much more reliable, keep insured safe, and are cost-effective in the long run. The multiple benefits of the plan outweigh the costs and these plans are ideal for people, who have some healthcare needs or health issues that require intensive health maintenance. The monthly premiums of these plans are high but the deductibles which the insured pays before the start of their insurance are quite low. Thus, people enrolled in these plans will end up paying less for their illnesses and surgeries.

Platinum Plans – The fourth category of the Metal tier plan is the platinum plan, which is quite expensive and is not for everyone. Individuals having these platinum plans have the most of the coverage. These plans are ideal for people who can afford high monthly premiums and who require a lot of health coverage in a year, as they will be able to save a huge amount with the platinum plans.

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