Explaining the Affordable Care Act: What do the different health coverage tiers mean?

Get Covered America buttons are seen during a training session in Chicago, Illinois September 7, 2013 before volunteers canvas a Chicago neighborhood to talk with residents about the Affordable Care Act - also known as Obamacare. Credit: Reuters
Get Covered America buttons are seen during a training session in Chicago on Sept. 7 before volunteers canvas a neighborhood to talk with residents about the Affordable Care Act — also known as Obamacare.
Credit: Reuters

Every week, Archelle Georgiou, MD, Strategic Advisor at Healthgrades, will explain one facet of the Affordable Care Act.

Bronze, Silver, Gold and Platinum: What’s the difference in these new health plan coverage tiers?

Unlike with jewelry, these descriptors don’t reflect the quality of insurance coverage. All plans offer coverage for all essential benefits mandated by the Affordable Care Act, such as preventive care, hospitalization and mental health care.

The difference is financial. The tiers refer to the share of health care expenses the insurer expects to cover for its aggregate group of enrollees. Bronze plans pay roughly 60 percent of the cost, Silver 70 percent, Gold 80 percent, Platinum 90 percent. These percentages are actuarial, meaning each individual’s responsibility may vary.

The level of financial coverage for an individual can differ across plans since the mix of deductible, co-pay and co-insurance will vary, even among plans within the same tier. For example, one Silver plan may have a higher deductible than another but lower co-payments. Yet another Silver plan could have a lower deductible but a higher percentage of co-insurance for hospital care.

To select the best plan for your financial needs, understand the four components of your total health insurance costs: premium, deductible, co-payment and co-insurance. Your premium is the monthly fee that must be paid regardless of whether or not health care services are used. Your deductible is the amount that must be paid out of pocket before insurance starts to pay for coverage. Co-insurance is the percentage of the cost of a health care service that the individual pays (after the deductible is met). This is different from a co-pay, a flat fee for a certain service.

The bottom line is that your level of coverage depends on how much and what type of health services you use.

Every week, Archelle Georgiou, MD, clinical adviser at Healthgrades, will explain one facet of the Affordable Care Act.


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