Should You Go for a Gold Plan?
What Is a Gold Plan?
A gold plan, also known as an Affordable Care Act (ACA) gold plan, is a metal level plan that provides a higher level of coverage in exchange for higher premiums. In 2021, gold plans are especially valuable because some of these high-coverage plans have lower premiums than plans that offer less coverage.
How Much Do Gold Plans Cost?
Gold plan premiums are typically the second highest among all metal level plans (just under platinum plans). A gold plan premium will vary depending on the area you live in. For example, here are the full priced plans available in a few areas:1
Gold Plan Premium
Gold Plan Premium
|Tarrant County, Texas||$375.77||$627.82|
|Clackamas County, Oregon||$398||$540.92|
|Wyandotte County, Kansas||$483.78||$641.26|
This year, gold plan premiums are not always more expensive than silver plans. In fact, they are not always more expensive than bronze plans. For example, let’s look at the full-priced premiums, in the same areas, for gold, silver, and bronze plans:1
Full-Price Gold Plan Premiums
|Full-Price Silver Plan Premiums||
Full-Price Bronze Plan Premiums
|Tarrant County, Texas||$375.77||$627.82||$398.76||$557.32||$261.14||$422.45|
|Clackamas County, Oregon||$398.00||$540.92||$384.00||$468.91||$285.00||$346.00|
|Wyandotte County, Kansas||$483.78||$641.26||$438.42||$613.05||$355.72||$431.72|
Are Gold Plans Worth It?
It all comes down to each plan’s actuarial value (AV). The actuarial value of a gold plan is 80%. This means that a gold level health plan will pay an average of 80% of all your covered medical costs each year. Because you are only expected to pay 20% of your medical expenses in a year, gold plans’ deductibles and other out-of-pocket costs are lower than silver (70% AV) and bronze (60% AV) plans.2
If you select a gold plan that is less expensive than a silver plan, you are paying less each month in order to spend less on your yearly medical expenses. Sounds like a pretty good deal, right?
Why are gold plan premiums less than silver plans this year?
There are a few reasons. First, cost-sharing reduction subsidy payments were eliminated by the government in 2017.3 Cost-sharing reduction subsidies (CSRs) help insurance companies lower out-of-pocket costs to low-income customers who purchase silver plans. When the funding was terminated, insurance companies needed to find a new way to make up for the financial loss. Since CSRs are only applicable to silver plans, some insurance companies decided to increase premiums for only silver plans.
Next, other metal level plans (platinum, gold, and bronze) did not experience the same severe increases to premiums. This was because they had no tie to cost-sharing reduction subsidies.
Finally, premium subsidies are calculated based on silver plan premiums. As silver plan premiums increase, so do premium subsidies. So, a person using an increased subsidy could get a better deal if they choose a metal level plan that isn’t seeing the same premium rate hikes as silver plans.
Gold Plans and Subsidies
The full priced premiums above are calculated without any premium subsidies. Premium subsidies (or premium tax credits) can be used to lower the monthly premium of any metal level plan, including gold. To be eligible for a premium subsidy, individuals must be between 100% and 400% of the Federal Poverty Level. For an individual, that’s between $12,880 to $51,520 annually. For a family of four, it’s between $26,500 to $106,000 annually.4,5
These subsidies also depend on the second-lowest silver plan (called the benchmark plan) available in your area. So, higher silver plan premiums mean higher premium subsides. For example, here are the expected premium subsidies an individual making $30,000 and a family of four making $60,000 can expect in those same locations:1
|Location||Individual With an Annual Income of $30,000 (male, age 30)||Family of Four With an Annual Income of $60,000 (adults, age 30)|
|Tarrant County, Texas||$289||$1,115|
|Clackamas County, Oregon||$274||$559|
|Wyandotte County, Kansas||$323||$658|
To put that into perspective, let’s apply the individual subsidies to the lowest-premium gold plans mentioned above:
|Location||Lowest Full-Price Gold Plan Premium||Premium After Individual Subsidy with an Annual Income of $30,000|
|Tarrant County, Texas||$375.77||$86.77|
|Clackamas County, Oregon||$398||$124|
|Wyandotte County, Kansas||$483.78||$160.78|
As you can see, utilizing premium subsidies can drastically decrease your premium expenses. It’s important to note that premium subsidies are only available for Affordable Care Act (ACA) plans. Additionally, if you qualify for affordable health insurance through an employer or Medicaid, you cannot apply for a subsidy.
If you are not eligible for a subsidy, you haven’t lost your chance to find an affordable gold plan. Gold plans sold outside of the ACA marketplace can be purchased directly from health insurance companies. A licensed insurance agent can help you shop around on and off the marketplace to help you find the best coverage at the best price.
Choosing Between Gold and Other Metal Level Plans
The type of health plan you choose is entirely dependent on your individual budget and needs. If you qualify for subsidies, and your budget allows, a gold plan could be great for you and your family. However, if you’re on a tight budget, bronze plans might better suit your needs. In fact, if you qualify for subsidies and are within a certain income level, you could qualify for a zero premium bronze plan.6
Not sure if a gold plan will work best for you and your family? Luckily, that’s exactly why we’re here. A licensed insurance agent can help you determine your subsidy eligibility, find coverage that matches your needs and budget, and even help you enroll before the Open Enrollment Deadline. All you have to do is give us a call at (800) 827-9990.