Healthcare plans in the ACA Marketplace are available in four metal tiers, Platinum, Gold, Silver, and Bronze. In some markets, catastrophic health plans are also available for people under 30. Individuals are required to choose a health plan during the open enrollment period, which they use for the entire next year. Therefore, it is important to carefully choose the metal plan that will work best for them. The metal plan that is popular among a great majority of people is the Silver health plan. People should have a good and clear understanding of the benefits as well as of drawbacks of each health plan. This will help them to choose the best plan, and get the most benefits from their plan.
What is a Silver Health Plan?
A Silver plan is a health plan that lies in the middle of the metal levels. Even the premiums of Silver plans and out-of-expenses are about halfway between the most expensive and cheapest health plan options. In the health insurance markets, Silver health plans on average pay around 70% of enrollees’ health care expenses, and the enrollees pay the remaining 30% of their health care expenses that are paid in copayments, deductibles, and coinsurance. It is known as a 70% actuarial value, or AV. It doesn’t mean that individuals’ 70% of the healthcare costs will be paid by their Silver plan. Instead, the plan pays 70% of the average costs for a standard population, and they will pay a far lower percentage of total costs for a healthy person, who uses very limited healthcare while paying far more than 70% of total costs for a very sick person who will get quite a good amount in claims.
What is the Premium of Silver Plans?
A premium of Silver plan is less expensive compared to gold or platinum-tier plans, primarily because silver plans anticipate to pay out less toward people’s health care bills. However, the price of Siler plans considerably varies from one insurer to another. Due to which people may find that one company’s silver plans are more expensive than another company’s Silver plans. People shopping in the individual market may find gold plans to be less expensive than silver plans. It is mainly because, in most of the states, the price of cost-sharing is added to the rates of the Silver plan. People receiving premium subsidies might find that some of the Bronze plans available to them are completely free of cost after applying the subsidies. The larger premiums for Silver plans may also be due to the Trump Administration’s decision to eliminate federal funding for cost-sharing reductions. Thus, it is vital for people to have a close look at all the plans available before finally coming to a decision.
Besides their monthly premiums, people also have to pay cost-sharing like coinsurance, deductibles, and copays every time they use their health insurance. How people share the cost of their Silver plan will vary from plan to plan. For instance, a Silver plan may have a $4,000 deductible paired with a 20% of coinsurance while another Silver plan may have a lower $2,000 deductible paired with a higher coinsurance and a copay for branded prescriptions. Some people who meet income requirements and purchase coverage in the exchange may receive cost-sharing reductions upon choosing a silver plan. These people will enjoy lower deductibles, lower copayments and coinsurance, and lower out-of-pocket maximums. Actuarial Value is increased to 94% for lower-income people, making Silver plan coverage better than a Platinum plan without any additional cost to enrollee.
People get a cost-sharing reduction benefit in the following cases:
- Have an eligible income
- Not eligible for employer-sponsored plans
- Legally present in the US
- Enroll in a Silver Plan through their State’s exchange
Why Should People Choose a Silver Plan?
People should choose a silver health plan in the following conditions:
- If they are looking to balance the cost of their monthly premiums with the cost of their out-of-pocket expenses
- If they want to avoid high premium plans like gold and platinum, and also higher deductible plans like Bronze plans.
- Individuals who are eligible for cost-sharing reductions need to avail silver plans only to get the subsidies. This is the most important reason for people picking a silver plan.
- A Silver plan with CSR benefits is best for people whose income doesn’t exceed 250% of the poverty level and if it doesn’t exceed 200% of the poverty level. A Silver plan with CSR benefits will be best for such people, as it will reduce their deductible, copays, coinsurance, and out-of-pocket maximum. CSR without raising the premium increases the actuarial value.