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EHB regulation: "Metal levels" will define health insurance value

February 20, 2013
by Dennis Grantham, Editor-in-Chief
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Soon, what has long applied to jewelry will apply to health insurance as well: "Nothing glitters like gold"

The final rule on Essential Health Benefits requires all new small group and individual market plans to cover Essential Health Benefits in ten categories,  including mental health and substance use disorder services, "at parity" with medical and surgical benefits.

But beneath the seeming equality suggested by the notion of a single "essential health benefit" that covers ten categories of services, the employees and consumers covered by the new generation of "affordable" health plans will learn what employers and insurers already know: that the real value of their health benefits will be expressed in more "precious" terms.
 
Starting in 2014, four "metal levels" will equate to the "actuarial value" of the benefits that will be paid out by new health insurance plans: platinum, gold, silver, and bronze.  In brief, actuarial value is defined as "the percentage that each plan will pay of the total allowed costs of medical coverage." In each case, the term "medical coverage" indicates the ten benefit categories required by the essential health benefit. 
 

Insurers and employers, not surprisingly, are mainly focused on the bottom tier of plans: bronze. Silver and gold plans will, by definition, offer a higher percentage of coverage for services, likely through lower deductibles and lower co-pays. However, they would also come with higher premium costs. Insurers are developing many bronze plans in the belief that people buying health plans on the insurance exchanges will be looking for plans with the lowest premiums, although such plans will also be those with the barest benefits. 

 
So now what's been true forever in jewelry will soon be true in health insurance:  "Nothing glitters like . . . platinum."

“Metal level” of health plan

Actuarial value (percentage of total allowed costs of medical coverage that will be paid by the plan)

Platinum

90 %

Gold

80 %

Silver

70 %

Bronze

60 %

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