Silver Health Plan: What is it and How Much It Costs?

Updated: December 2, 2022
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A Silver health plan is the metal tier in the middle of the four metal tiers’ pricing and coverage ranges. Unsubsidized Silver premiums fall about in the middle of the price range. Your income, the number of people, insured, and the plan you select will all impact the monthly payment for a Silver plan. With a Silver health plan, the out-of-pocket costs for medical care are likewise average. With a Silver health plan, your insurer will typically cover roughly 70% of the price of covered services. On average, you will be in charge of the final 30%. However, Silver health plans’ cost-sharing reductions could help you pay less out of cash for medical expenses.

What Does an Affordable Care Act Silver Plan Include?

A silver plan has a 70% actuarial value, or AV when it covers around 70% of the average population’s medical expenses. This does not imply that your silver plan will personally cover 70% of your medical expenses. Instead, the program covers 70% of the average costs for a specific population. However, they will cover a much smaller proportion of the total expenses for a healthy enrollee who uses healthcare services seldom. They will cover a much more significant balance of the total costs for a very ill enrollee who submits a million dollars worth of claims.

Because it would be complicated for health insurers to create plans that exactly reach 70% AV, there is a permissible de minimus range, even though a silver plan typically has an AV of around 70%.

 

Keep in mind that California has its regulations and only permits a range of 68-72%; also, California mandates that all plans be standardized, doing away with the type of plan variety we see in other states.

Non-covered medical costs are not considered when calculating a health plan’s worth. For instance, the price of over-the-counter medications will only be considered when determining the worth of your silver-tier health plan if it offers coverage. Additionally, care that is not covered by the ACA’s definition of essential health benefits does not count, nor do out-of-network services.

 

Standardized Value Levels under the Affordable Care Act

The Affordable Care Act (ACA) standardized value levels for health plans in the individual and small group markets, making it easier to compare the value you are receiving for the premiums you pay. This makes it simpler to evaluate whether or not you are getting a good deal.

These tiers or levels are:

  • Bronze
  • Silver
  • Gold
  • Platinum

Additionally, those under 30 and those eligible for a hardship exemption from the ACA’s mandate can purchase catastrophic policies in the individual market.

The same classification system applies to all individual and small-group major medical insurance sold throughout the United States, including outside of exchanges. Even outside of the exchange, health plans that aren’t ACA-compliant and don’t fall under one of those coverage categories can no longer be marketed in the individual large medical market.

However, ACA restrictions do not apply to excepted benefit plans, and the metal level categories do not apply to these kinds of insurance. Vision and dental insurance, short-term health insurance, fixed indemnity plans, critical sickness plans, and accident supplements are examples of exempted benefits. Other forms of insurance, including long-term care insurance, Medicare Supplement (Medigap) insurance, and disability insurance, are exempt from ACA rules. Despite being subject to some ACA restrictions, large-group health plans are not subject to metal level designations.

What are cost-sharing reductions, and how do they influence the selection of a Silver plan?

Due to the American Rescue Act of 2021, all plans’ monthly payments have become more affordable than ever for the 2022 coverage year. Your monthly premium expense will be decreased if you are eligible for a premium tax credit, sometimes referred to as a premium subsidy.

A benchmark plan (the second-cheapest silver plan) has a mandatory premium contribution from each individual that is capped at a specific percentage of their income. This is how marketplace subsidies work. 4 out of 5 people may obtain a plan for $10 or no monthly money due to the American Rescue Act and its new financial assistance with premiums. According to a recent study by the Kaiser Family Foundation, current individual market enrollees may be expected to pay $205 per month on average for a benchmark silver plan, ranging from $0 for those whose incomes are below 150% of the poverty level to an average of $513 for those whose incomes are above 600% of the poverty level.

For those who select a Silver health plan and fall within a particular income level, cost-sharing reductions are further savings options. There are several ways cost-sharing reductions work with a Silver health plan:

  • A decreased deductible. Most health insurance plans require you to satisfy a certain deductible each year before your insurance starts covering its share of the cost (about 70% for Silver policies). For instance, you might have a $1200 annual deductible. However, depending on your income, your deductible could be cut to $700, $500, or another amount if you are eligible for a cost-sharing reduction.
  • Coinsurance or copay reductions. This implies that these per-visit prices could decrease, for example, from $35 to $15 or $20. This implies that with your Silver health plan, you pay less each time you see the doctor.
  • Lower maximum out-of-pocket amounts. There is normally a maximum out-of-pocket limit for ACA health insurance policies. Once it is achieved, all covered expenses are paid for by the insurance company. With a Silver health plan and cost-sharing reduction, your out-of-pocket expenses may dramatically decrease.

Silver Plans in comparison to Bronze Plans

Customers like silver plans above the other metallic plan level the most. Bronze plans, which often have slightly cheaper unsubsidized premiums, are offered after Silver plans. The Kaiser Family Foundation estimates that in 2022, of the Americans who used the marketplace, 56% (8.1 million) bought Silver plans, 32% (4,7 million) bought Bronze plans, and 10% (1.4 million) bought Gold plans. For the previous three years, this distribution has been comparatively constant.

Generally, the monthly price for a Bronze plan is less than the monthly premium for an unsubsidized Silver plan. A Bronze plan is preferable due to its reduced monthly fee. However, if you enroll in a Bronze plan rather than a Silver plan and your income is less than 250% of the federal poverty level, you are not eligible for cost-sharing reductions. You would be responsible for covering any out-of-pocket expenses necessary for the Bronze plan. Most of the time, choosing a Silver plan and taking advantage of cost-sharing reductions will make the most sense for consumers at the lower end of the income spectrum. If eligible, you must select a Silver plan (or higher metal tier) to obtain discounts on out-of-pocket costs.

Who ought to purchase a Silver health plan?

Many find that a Silver health plan balances premium and out-of-pocket medical expenses. However, a Bronze or catastrophic plan saves you money if you’re young, don’t plan to need insurance frequently, and have a sizable amount of cash in savings.

A Silver health plan may not be the most cost-effective option if you expect to need a lot of medical care for long-term problems. A gold plan can be preferable if you or your family is qualified for premium subsidies and cost-sharing reductions. This is because the premium subsidy may reduce your out-of-pocket costs for coinsurance, deductibles, and copayments while making the monthly premium for a gold plan more affordable.

 

What Costs Are Involved with a Silver Plan?

Premiums

Since silver plans anticipate paying less toward your medical expenses than gold or platinum-tier policies, silver plan premiums are often less expensive. However, prices vary widely amongst insurers, and you may frequently find that one company’s silver policies are more expensive than another company’s gold plans.

Your eligibility for premium-free bronze, gold, and even silver plans may also depend on your income. For registrants with quite modest earnings, the American Rescue Plan (ARP) has lowered the percentage of income that consumers must pay for the second-cheapest silver plan (the benchmark plan), bringing it down to 0%. However, a bronze or gold plan can be accessed without monthly payments, even for those with greater salaries.

Some persons were qualified for premium-free bronze plans and, in some locations, premium-free gold insurance even before the American Rescue Plan was implemented. Since 2018, when the Trump administration stopped providing federal cash for cost-sharing reductions (CSR), the cost of CSR has been included in the premiums for silver plans in most states. Due to this, silver plan premiums are disproportionately higher, and most states’ premium subsidies are correspondingly higher.

Although some people had access to premium-free plans in specific locations, these weren’t typically silver plans. Many marketplace enrollees now have access to premium-free silver plans thanks to the American Rescue Plan.

Cost-sharing

Every time you use your health insurance, you’ll be required to make cost-sharing payments like deductibles, coinsurance, and copays in addition to your monthly premiums.

Each silver plan will have a different payment schedule for your cost-sharing contribution. One silver plan, for instance, would have a $4,000 deductible and a 20% coinsurance. Even while a competitive silver plan’s $2,000 deductible is smaller, it may come with a higher coinsurance rate and a $40 copay for brand-name prescription drugs.

Some individuals who satisfy certain income requirements and purchase individual market coverage on the exchange may be eligible for cost-sharing reductions if they select a silver plan. Individuals who qualify for cost-sharing reductions enjoy lower deductibles, copayments, coinsurance, and lower out-of-pocket maximums as long as they choose a silver plan.

For lower-income subscribers, cost-sharing reductions increase AV to 94%, giving them better coverage than a platinum plan at no extra expense.

The federal government compensated the insurers for giving this benefit from 2014 through most of 2017. That financing ran out in late 2017, and insurers now factor the cost into the premiums they offer.

The following requirements must be met to qualify for the cost-sharing reduction benefit:

  • Your household income for the previous year must not have exceeded 250% of the federal poverty level. To calculate the percentage for 2022 coverage, the individual’s 2022 income is contrasted with the 2021 poverty level figures.)
  • You are ineligible for reasonably priced, minimum-value employer-sponsored health insurance.
  • Enroll in a silver plan on the exchange in your state
  • Are you physically present in the US legally?

 

 

Summary

Under the Affordable Care Act (ACA), health plans in the individual, family & small group markets are classified into four metal levels based on the amount of a typical population’s medical costs that each plan covers: bronze, silver, gold, and platinum. The percentage of costs that silver plans will cover for individual participants varies greatly depending on how much care they require; nevertheless, this number only applies to the overall standard population.

Individual/family silver plans available through the health insurance exchange will cover a higher percentage of costs if the enrollee’s household income is below 250% of the federal poverty threshold, even though normal silver plans typically cover about 70% of costs. This is especially true if household income isn’t much higher than the poverty line (200%).

 

FAQs

Is the Silver health plan a high deductible?

As HDHPs, Silver and Bronze plans typically have lower premiums, higher deductibles, and out-of-pocket expenses. Gold and Platinum plans typically have high premiums and low deductibles and are not considered HDHPs.

 

Which silver plan has the second-lowest cost?

The benchmark plan is the second least expensive silver plan in your area. It covers you, your spouse, and your dependents who are enrolled in Marketplace coverage but are not eligible for other health insurance coverage, like coverage from an employer or the government.

 

Why do silver plans offer me additional savings?

If you register for a Silver plan and are eligible for out-of-pocket cost savings, your deductible will be lower. This indicates that the insurance company will cover its portion of your medical expenses sooner.

 

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