With the higher health insurance subsidies provided by the American Rescue Plan, the Silver metal options for many consumers are more affordable. In particular, the Enhanced Silver Plans can offer an exceedingly good deal when considering the lower copayments for health care and the lower maximum out-of-pocket cost. If the cost of the Bronze plan is virtually the same as a Silver plan with the higher subsidies, seriously consider Silver, especially if you are offered and Enhanced Silver plan.
What is an Enhanced Silver Plan?
Enhanced Silver plans have lower consumer cost-sharing compared to the standard Silver 70. The Enhanced Silver plans are denoted as Silver 73, 87, and 94.
What do the numbers represent?
Each metal tier health plan offered by Covered California is assigned an actuarial number.
- Bronze 60
- Silver 70
- Gold 80
- Platinum 90
The number represents the percentage of health costs that will be covered for the average person in the insured pool by the health plan. The average person with a Bronze 60 plan can expect to have 60 percent of their health care costs covered by the plan. A person with a Platinum 90 plan can expect, on average, to have 90 percent of their health care costs covered. Of course, this is for the theoretical average person. Most people will experience a higher or lower percentage of coverage.
For example, if a person with a Bronze 60 plan experienced a major illness that resulted in $100,000 in medical bills, that person would only be required to pay $8,200, the maximum out-of-pocket amount. That $8,200 represents 91.8 percent coverage of the health care costs, far higher than the 60 percent Bronze rating. Conversely, a person who had outpatient surgery and the cost fell within the deductible of the Bronze 60, meaning the patient had to pay 100 percent of the price, that member would realize health care costs covered below 60 percent of the average.
When it comes to the Enhanced Silver plans (73, 87, 94) they are awarded based on household income. You cannot apply for a specific Enhanced Silver plan. However, the rates of the Enhanced Silver plans are exactly the same for the standard Silver 70 offered by the respective carrier. The monthly rates are lower because the subsidy is higher, based on a lower estimated income.
The Enhanced Silver plans have higher actuarial numbers because costs the member pays for health care services is generally lower. This means the carrier is covering more of the cost. The average person in a Silver 87 plan will have 87 percent of their health care costs covered by the health plan. This means a Silver 87 is better than a Gold 80. A Silver 94 is a better value than a Platinum 90.
The health care challenges that people face are different and unique. If an individual must see a doctor on a regular basis, along with tests and prescription medications, any of the Silver plans will generally save that person money over the course of the year. When you factor in the monthly health insurance premiums, the standard Silver 70 may still be less expensive than a Gold 80 or Platinum 90.
Lower Maximum Out-of-Pocket Amounts
But what about people who never see a doctor? The Enhanced Silver plans, when factoring in the premiums, make more sense for catastrophic coverage because of the lower maximum out-of-pocket amounts. If we look at health insurance as asset protection, similar to home and auto insurance, then we are attempting to reduce our liability for a catastrophic claim.
The Bronze 60, Silver 70 and Gold 80 all have the same maximum out-of-pocket amount. The Enhanced Silver plans have lower maximum out-of-pocket amounts. For pure asset protection, regardless of whether you ever see a doctor or get a test, the Enhanced Silver plans have the smallest liability for health care expenses for the premium dollar.
You don’t have to qualify for a Silver 94 to get a great deal. A 57-year-old individual with an estimated income of $30,000 in Nevada County will receive a subsidy large enough to make the lowest cost Silver plan from Anthem Blue Cross $1, the same as all the Bronze plans. Even the Blue Shield PPO Silver 73 at $85.11 is a better value than either the Gold or Platinum plans offered.
Unfortunately, making less money does not equate into lower health insurance premiums after the subsidy. The rates are based on age, region, and the cost of the Second Lowest Cost Silver Plan. A 24-year-old individual in San Mateo County earning $25,000 qualifies for a Silver 87 plan. Kaiser Silver 87 is the most reasonable and if you are not averse to the Kaiser system, it is better than any of the Bronze options. Even if you were to pay $100 per month for the Silver 87 plan, the premium payments would still be less than the savings on the deductible and maximum out-of-pocket compared to a Silver 70 plan.
I have avoided discussing Hight Deductible Health Plans (HDHP) that are Health Savings Account compatible. If you have an H.S.A. you can pare with a Bronze plan, that may be a better option than an Enhanced Silver plan in terms of monthly cost. But starting an H.S.A. plan from scratch when compared to an Enhanced Silver plan is not a good economic move. Otherwise, always give the Enhanced Silver plans serious consideration even if you have to pay extra every month.