A gold plan, also known as an Obamacare Gold Plan, is a metal level plan that provides a higher degree of coverage in exchange for higher premiums.
Gold plans for 2018 are especially valuable because some of these high-coverage plans have lower premiums than plans offering less coverage.
Gold Plan Premiums Compared to Other Metal Level Plans
Gold plan premiums are typically the second most expensive among all metal level plans. (The price usually lands 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:
|Location||Lowest Full-Price |
Gold Plan Premium
|Highest Full-Price |
Gold Plan Premium
|Tarrant County, Texas||$460.26||$583.52|
|Clackamas County, Oregon||$383||$548|
|Wyandotte County, Kansas||$457.68||$704.17|
This year, gold plan premiums are sometimes less expensive than silver or bronze plans. For example, let’s look at the full-priced premiums, in the same areas, for gold, silver, and bronze plans:
Full-Price Gold Plan Premiums
|Full-Price Silver Plan Premiums|| |
Full-Price Bronze Plan Premiums
|Tarrant County, Texas||$460.26||$583.52||$397.02||$613.27||$364.78||$464.56|
|Clackamas County, Oregon||$383.00||$548.00||$359.00||$463.00||$259.00||$345.00|
|Wyandotte County, Kansas||$538.07||$614.78||$512.36||$558.47||$395.54||$449.23|
Why does it matter that some gold plans are less expensive than silver plans?
It all comes down to each plan’s actuarial value (AV). The actuarial value of a gold plan is about 80 percent. This means that a gold-level health plan will pay an average of 80 percent of all of your covered medical costs each year. Because you are only expected to pay 20 percent of your medical expenses in a year, gold plans’ deductibles and other out-of-pocket costs are lower than silver (70 percent AV) and bronze (60 percent AV) plans.
So, 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.
Why are gold plan premiums less than silver plan premiums this year?
There are a few reasons. First, cost-sharing reduction (CSR) subsidy payments were eliminated by the government. CSRs help insurance companies lower out-of-pocket costs for 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, most insurance companies decided to increase premiums for only silver plans.
Next, other metal-level plans (platinum, gold, and bronze) did not experience the same premium increases. This is because they have no tie to CSR 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 percent and 400 percent of the Federal Poverty Level. For an individual, that’s around $12,000 to $48,000 annually. For a family of four, it’s around $24,000 to $97,000 annually.
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:
|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||$179||$878|
|Clackamas County, Oregon||$132||$272|
|Wyandotte County, Kansas||$305||$1,302|
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 ($30,000 Annual Income)|
|Tarrant County, Texas||$460.26||$281.26|
|Clackamas County, Oregon||$383||$251|
|Wyandotte County, Kansas||$538.07||$233.07|
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 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 health insurance agent can help you shop around on and off the marketplace to 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.
Not sure if a gold plan will work best for you and your family? Luckily, that’s exactly why we’re here. One of our licensed health insurance agents 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. Give us a call at (800) 304-3414.