California health insurance     Health Reform for California     The Silver Exchange Plan

Why Does the Silver Exchange Plan Matter?

Jan 1st 2014 will mark the era of the Metallics.  It's not some futuristic forecast of shiny benefits but a reflection of the new Exchange health plans that will be available to everyone effective as of that date.  There is a Platinum, Gold, Silver, and Bronze option available in the Exchange.  What do these names reflect in terms of level of benefit and why is the Silver specifically important to the California health insurance market?

Introduction to the Metallic Plans

First, what's the difference between the four levels?  According to health reform, each State will choose a baseline health plan.  California decided on the Kaiser $30 copay no-deductible small group plan as their baseline.  Based on this, there will be four core plans (and a more catastrophic plan for younger people) designed on "actuarial value".  This is one of those lovely insurance terms that even people well versed in California health insurance have a difficult time explaining.  Actuarial value.  What is that?  Basically, it's an approximation of benefit level according to how a plan might pay out for health claims.  The platinum was given a 90% actuarial value of the Kaiser $30 copay plan mentioned above.  This means that it is expected to pay out 90% of the claims that the Kaiser plan would pay out.  The member would then pay out 10% more than what a member on the Kaiser plan would pay as an example.  Since the Kaiser plan is a no-deductible, $30 copay plan, what does 90% really mean?  The California Exchange released their baseline Exchange benefits which you now view although the carriers will each have slightly different renditions. 

So what about the other Metallic plans?

Gold will have an 80% actuarial value (no deductible or very small).  Silver will have a 70% actuarial value (approximately a $1500 deductible, etc).  Bronze will have a 70% actuarial value ( $3000-4000 deductible, etc).  There can also be differences in other other benefits such as doctor copays, prescription coverage, coinsurance, and max out of pocket but a lot of what must be included (Essential health benefits) is mandated by the law.  For example, all plans will cover maternity.  Our estimate is that most of these differences will be mute and the vast majority of enrollee in an exchange plan will go with the Silver option and here's why.

Have Silver, Will Subsidize.

As the law is currently interpreted, only the Silver plan enrollees will be able to receive a cost sharing benefit and this is critical.  This cost sharing benefits for people who make between 138% and 250% of the Federal Poverty Level will improve their benefits on a sliding scale basis.  Our belief is that the only reason you would buy a plan in the Exchange is due to the subsidy/cost sharing benefit and since only the Silver plan is eligible.  The reason for this merits its own article but it should bare out.  For this reason, the Silver will be the go to Exchange plan and of course, you will be able to quote it here at starting Oct 1st, 2013.  You can follow our Facebook page for notification when the new rates are ready to quote or run your Quote here.

NEW!  California Health Subsidy Calculator  (until we have exact rates October 1st, 2013)

Popular Related Pages:

The Bronze Health Plan Rules
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Subsidies to help buy California health coverage
Introduction to the California health exchange





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