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Bronze to Platinum: How Health Insurance Metal Tiers Work

May 24, 2016
Finding Health Insurance, Health
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Even if you like to comparison shop before you buy, open enrollment can be a dizzying experience.

Health insurance policies are almost as unique as the people they’re meant to cover. Each has its own rules and cost sharing structure, and premium rates vary tremendously across plans. The metal tier system removes some of the confusion by dividing health plans into categories based on premiums and how generously each covers medical costs. The idea is to help consumers compare similarly priced plans side by side.

Not all health insurance plans have to adhere to the metal tier system, just policies sold privately, on the health insurance exchange. Employer-sponsored plans don’t have to use metal tiers, though many do. If you’re shopping for insurance, read on to understand what metal tiers will mean for your wallet.

What the tiers mean

Some metals found in nature are more valuable than others, and they cost more. Similarly, you can think of metal tiers in health insurance as indicating the relative value of a health plan, with high-value plans costing more in monthly premiums.

There are four metal tiers in health insurance: platinum, gold, silver and bronze. Each refers to a different value level, or portion of your medical costs you will have to pay in addition to your premiums.

High-value plans cover the largest portion of bills, leaving you with the lowest out-of-pocket costs. For example, “a bronze plan will not be as valuable as a gold plan,” says Joseph E. Ellis, senior vice president at CBIZ Benefits and Insurance Services. “There will be a lower overall payment by the insurance company from a bronze plan and higher out-of-pocket costs” than with the gold plan, he adds.

Here’s how the breakdown of costs works within metal tiers. The percentages below are averages estimated by your insurer, not hard rules for out-of-pocket costs.

Health insurance plan cost breakdown by tier

Metal tierPortion you pay out of pocketPortion of bills your plan pays

Note that even with the highest-value plan, you still have to pay some of your medical bills. Having health insurance doesn’t mean you don’t have to pay for care at the time of service. In some cases, you may have to pay your entire deductible before your plan pays any of your medical bills.

Which metal tier is right for your needs?

When choosing a health insurance plan, the last thing you want to do is opt for an attractively low premium only to find yourself mired in medical debt down the road. But there’s also no reason to pay for a high-value plan if you don’t often use medical care.

» MORE: Your step-by-step guide to choosing a health insurance plan

When comparing plans, “the biggest factor to consider is whether you and your family have recurring medical issues or expenses,” says Dr. Jonathan Weiss, founder of HealthEngine, a health-care price shopping website. If so, he adds, “you may want to choose a richer plan that pays for more of those expenses.”

Silver plans have been the most popular on the federal marketplace and state exchanges, with 70% of consumers choosing them, but silver may not be your color. The best way to get started is to think about last year’s medical expenses and choose which of the following situations is closest to your own.

Guide to the metal tiers

Metal tierYour situation is closest to:
  • You rarely get sick or need medical services, apart from an annual checkup and maybe a medication or two.

  • You are very healthy and not elderly.

  • If buying a family plan, your children are grown and healthy and don’t participate in risky activities.
  • Silver
  • Your family members have one or two mild conditions that require some medication and specialist visits, but nothing needing close monitoring or frequent care.

  • Your family members are able-bodied and under 70.

  • Any kids are elementary age or older and healthy, and play few or no sports that often cause injury.
  • Gold
  • You or a family member has a chronic condition, sees doctors frequently or needs expensive medication that would be impossible to afford out of pocket.

  • Your children are preschool age or younger, needing frequent pediatrician visits.

  • You may be older or at a higher risk for colds and flu than most people.
  • Platinum
  • You or a family member has an expensive chronic condition and takes several medications.

  • You seek urgent or emergency care more than once per year on average, frequently need exams to manage a condition or see doctors more than once per month.

  • You are older or at very high risk for colds, flu, or injuries.
  • Ideally, you could choose the metal tier that best matches your situation, but if you can’t afford the premiums, you should probably choose the next best tier you can afford. “Remember that we are protecting ourselves from serious financial trouble by choosing the most suitable plan,” Ellis says.

    If you can’t pay your premiums, your health plan could be canceled in a matter of weeks, leaving you with full-cost medical bills all year and an Obamacare penalty for going without health coverage. If you’re shopping on a state or federal exchange, subsidies in the form of tax credits may help you afford health insurance, but try not to go without coverage if you ever need medical care.

    » MORE: The maximum income for getting Obamacare subsidies

    On the other hand, if you can afford to do so, consider bumping up to a higher value plan if a member of your family has a planned surgery coming up or may become pregnant. In these cases, you’ll likely have to pay a lot out of pocket, perhaps up to your plan’s maximum.

    Even though your health is at the focal point of this decision, it is also a financial decision. Spending the time to ensure you have all the benefits your family needs — and no more — could save you stress and money down the road.

    Lacie Glover is a staff writer at NerdWallet, a personal finance website. Email: [email protected] Twitter: @LacieWrites.