Health Plan Categories

Definition of 'Health Plan Categories'


Four types of health insurance plans that are differentiated based on the average percentage of health-care expenses that will be paid by the plan. Under the Patient Protection and Affordable Care Act (ACA), the U.S. health reform enacted March 23, 2010, health insurance plans are offered in four actuarial levels: Bronze, Silver, Gold and Platinum. The level defines the amount of expenses each type of plan covers. The higher the actuarial value (i.e. Gold and Platinum), the more the plan will pay, on average, toward health-care expenses; the lower the actuarial value (Bronze and Silver), the less the plan will pay.

Investopedia explains 'Health Plan Categories'


On average, the actuarial values for the four coverage tiers are:

  • Bronze = 60%
  • Silver = 70%
  • Gold = 80%
  • Platinum = 90%
All plans cover the same set of Essential Health Benefits. Because each plan is different in terms of deductible, copayments and coinsurance amounts, your share of the costs may come in the form of a large deductible with low coinsurance (for example, a $4,000 deductible with 10% coinsurance) or a small deductible with high coinsurance (such as a $1,500 deductible with 30% coinsurance). With all health plans, consumers pay a monthly fee known as a premium whether or not they use health-care services. Premiums are typically higher for plans that pay more of your medical expenses when you get care, such as Gold and Platinum plans. In general, premiums are also higher for plans that have lower deductibles and lower coinsurance amounts.

In addition to the four “metallic” coverage tiers, a catastrophic level is available to people under age 30 and to certain people over age 30 who are granted hardship exemptions based on income and other circumstances that would prevent them from getting a Bronze, Silver, Gold or Platinum plan. There are 12 reasons for which someone may be granted a hardship exemption, including being homeless, having substantial property damage resulting from fire, flood or other disaster, and filing for bankruptcy in the last six months.



comments powered by Disqus
Hot Definitions
  1. Degree Of Financial Leverage - DFL

    A ratio that measures the sensitivity of a company’s earnings per share (EPS) to fluctuations in its operating income, as a result of changes in its capital structure. Degree of Financial Leverage (DFL) measures the percentage change in EPS for a unit change in earnings before interest and taxes (EBIT).
  2. Jeff Bezos

    Self-made billionaire Jeff Bezos is famous for founding online retail giant Amazon.com.
  3. Re-fracking

    Re-fracking is the practice of returning to older wells that had been fracked in the recent past to capitalize on newer, more effective extraction technology. Re-fracking can be effective on especially tight oil deposits – where the shale products low yields – to extend their productivity.
  4. TIMP (acronym)

    'TIMP' is an acronym that stands for 'Turkey, Indonesia, Mexico and Philippines.' Similar to BRIC (Brazil, Russia, India and China), the acronym was coined by and investor/economist to group fast-growing emerging market economies in similar states of economic development.
  5. Pension Risk Transfer

    When a defined benefit pension provider offloads some or all of the plan’s risk – e.g.: retirement payment liabilities to former employee beneficiaries. The plan sponsor can do this by offering vested plan participants a lump-sum payment to voluntarily leave the plan, or by negotiating with an insurance company to take on the responsibility for paying benefits.
  6. XW

    A symbol used to signify that a security is trading ex-warrant. XW is one of many alphabetic qualifiers that act as a shorthand to tell investors key information about a specific security in a stock quote. These qualifiers should not be confused with ticker symbols, some of which, like qualifiers, are just one or two letters.
Trading Center