Insurance terms to guide you in making informed decisions

Actuarial value (AV) represents the average percentage of medical bills that will be paid by a health insurance plan during a calendar year were that plan offered to a large population of people. In plain language it means, what the insurance plan will pay.

There are four levels of plans defined by a metal: Platinum 90, Gold 80, Silver 70 and Bronze 60  The plan name tells you the actuarial value.  A Silver 70 health plan has an actuarial value of 70 and will pay around 70% of medical costs.

Each metal plan must meet a specific AV, which becomes the common currency for comparing and evaluating plans.

Plan Actuarial Value
(Insurance pays)		 You pay Premium
Platinum 90 90% 10% $$$$ (highest premium)
Gold 80 80% 20% $$$
Silver 70 70% 30% $$
Bronze 60 60% 40% $ (lowest premium)

To understand health insurance you must first understand the three basic elements on every insurance policy: deductible, cost-sharing (or coinsurance) and out-of-pocket maximum.

  • The Deductible: The amount the plan member pays before the medical insurance company pays anything. If you have a larger, unexpected medical bill, and your plan has a $4,000 deductible, you must pay the first $4,000 before the health plan will pay any of the bills. In  a family of four people, each person has their own $4,000 deductible.  However, once the deductible reaches $8,000–the family deductible–no further medical bills go toward the deductible.   Important Note
  • Cost-sharing or Coinsurance: After meeting the deductible, the plan member and the medical insurance company share the remaining expenses, with the insurance company paying a larger portion (e.g., 80%) and the plan member paying a smaller portion (e.g., 20%). Cost sharing typically applies to large expenses such as hospital, inpatient and outpatient surgeries and more expensive imaging tests.
  • The Out-Of-Pocket Maximum (OOP Max): The most a plan member will pay in any calendar year. After an individual reaches his/her OOP Max, the medical insurance company will pay all remaining expenses.
  • Copay: For doctor visits and prescription drugs, the health plan may have a copay, which is a fixed dollar amount the plan member pays for a health care service at the time of service.  The copay bypasses the deductible, but is credited towards the out-of-pocket maximum. An example might be a $50 copay to see a general doctor or a $15 copay for a generic medication.

In the following table, the plan details are based upon “model” plans; each company’s health insurance plans may have slight variations compared to these model plans. But all plans from all companies must meet the requirements for actuarial value.

THE METAL PLANS
PLATINUM GOLD SILVER BRONZE (HDHP)
Actuarial Value 90% 80% 70% 60%
Premium $$$$ $$$ $$ $
Deductible per person $0 $0 $4,000 $6,900
Coinsurance
Cost-sharing		 10% 20% 20% 0%
Max OOP IND (per person)
Family (2+)		 $4,500
$9,000		 $7,800
$15,600		 $7,800
$15,600		 $6,900
$13,800
Click for Example

Why using in-network providers saves you money

ImportantImportant Note: One of the biggest benefits of having a health insurance plan is the ability to pay the “negotiated fee” for medical services for doctors, labs and hospitals. The negotiated fees are substantially lower than a provider’s regular fees.

For example, insurance companies contract with physicians to keep office visits affordable. They also contract with laboratories and hospitals. In exchange for lower negotiated fees, insurance companies include providers on their network and then encourage plan members to choose providers from within the network.

Unfortunately, these regular and negotiated fees are not published, and the only way to find them is to look at an Explanation of Benefits (EOB) to see what the doctor submitted (regular rate) and what the insurance company allowed (negotiated fee).

Sample fees for several medical services
Office visit costs Regular fee Negotiated fee
Family or General Practice $150 $80 to $100
Specialist $250 $125 to $150
Expenses subject to deductible:
X-ray $125 $75
MRI $1,500 $1,000
Surgery $2,500 $1,500

Plan members will pay less for services when they see in-network providers. If they choose to go out-of-network, they will pay the regular fee and it will be subject to a separate and larger out-of-network deductible.

ImportantImportant Note: Plan members should always log on to the insurance company website, and use the “Find Provider” tool to make sure their doctor is in-network. Members should also double check by verifying provider is still in-network when calling to make an appointment.

The 2020 “Metal” Health Plans