CMS recently released a bulletin (pdf) on how the Department of Health and Human Services plans to define actuarial value for qualified health plans and other non-grandfathered coverage in the individual and small group markets.
Under the Patient Protection and Affordable Care Act, health insurers must offer plans within health insurance exchanges that meet distinct levels of coverage in the "metal tiers": bronze, silver, gold and platinum.
Each metal tier corresponds to an actuarial value. Actuarial value is calculated by computing the ratio of total expected payments by the plan for essential health benefits and cost-sharing rules — such as deductibles, co-insurance, co-payments and out-of-pocket limits — with the total costs of the EHB the standard population is expected to incur. For example, a health plan with an actuarial value of 80 percent would be expected to pay an average of 80 percent of a standard population's expected medical expenses for the EHB. Individuals covered by the plan would then be expected to pay the remaining 20 percent, on average, through deductibles, co-pays, etc.
Bronze plan
A bronze plan is required to have an actuarial value of 60 percent. Therefore, covered individuals would be expected to pay 40 percent through deductibles, co-pays and other cost-sharing features.
Silver plan
A silver plan is required to have an actuarial value of 70 percent. Therefore, covered individuals would be expected to pay 30 percent through deductibles, co-pays and other cost-sharing features.
Gold plan
A gold plan is required to have an actuarial value of 80 percent. Therefore, covered individuals would be expected to pay 20 percent through deductibles, co-pays and other cost-sharing features.
Platinum plan
A platinum plan is required to have an actuarial value of 90 percent. Therefore, covered individuals would be expected to pay 10 percent through deductibles, co-pays and other cost-sharing features.
Under the Patient Protection and Affordable Care Act, health insurers must offer plans within health insurance exchanges that meet distinct levels of coverage in the "metal tiers": bronze, silver, gold and platinum.
Each metal tier corresponds to an actuarial value. Actuarial value is calculated by computing the ratio of total expected payments by the plan for essential health benefits and cost-sharing rules — such as deductibles, co-insurance, co-payments and out-of-pocket limits — with the total costs of the EHB the standard population is expected to incur. For example, a health plan with an actuarial value of 80 percent would be expected to pay an average of 80 percent of a standard population's expected medical expenses for the EHB. Individuals covered by the plan would then be expected to pay the remaining 20 percent, on average, through deductibles, co-pays, etc.
Bronze plan
A bronze plan is required to have an actuarial value of 60 percent. Therefore, covered individuals would be expected to pay 40 percent through deductibles, co-pays and other cost-sharing features.
Silver plan
A silver plan is required to have an actuarial value of 70 percent. Therefore, covered individuals would be expected to pay 30 percent through deductibles, co-pays and other cost-sharing features.
Gold plan
A gold plan is required to have an actuarial value of 80 percent. Therefore, covered individuals would be expected to pay 20 percent through deductibles, co-pays and other cost-sharing features.
Platinum plan
A platinum plan is required to have an actuarial value of 90 percent. Therefore, covered individuals would be expected to pay 10 percent through deductibles, co-pays and other cost-sharing features.
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