Choosing Between Different Metal Plans for 2019 – 2020
Under the ACA, health plans are ranked according to metals where the plans are ranked bronze, silver, gold, and platinum. Bronze has the lowest premiums and highest cost sharing, platinum has the lowest cost sharing and highest premiums.
The right plan for you is generally going to be the one that will save you the most money while still having an affordable premium.
If you know you’ll need a lot of medical services, for example if you have a big family who has ongoing medical issues or needs drugs, then it is likely higher premium plans will provide the best value over time.
Meanwhile, if you are young and healthy and qualify for cost assistance or would benefit from maximizing out your HSA, you likely want to go with a high deductible plan with a lower premium.
The main problem in picking a health plan when it comes to cost considerations however is that you can’t see the future.
Insurance is a hedge against the unknown for the most part. If you have a bronze plan and then need lots of medical attention, you’ll likely end up paying more than you would have with a higher deductible plan.
Likewise, if you get that gold plan and then don’t end up needing care, it could turn out that the silver plan would have been your best bet.
One more consideration here is how cost assistance works with these plans. Only silver plans qualify for out-of-pocket cost assistance, so if you think there is a chance your income will be between 100% – 250% of the poverty level this could be your best hedge! Meanwhile, cost assistance caps the total amount you can spend on premiums, so if your income is low, you might actually benefit from a more robust plan.
Now add into that plan types and benefits, and actually picking the right health plan in terms of value and benefits is rather hard.
There is a good chance the plan you buy in a year won’t be the best value when the year is done, so make sure when it comes to health plans you are considering multiple years. For example I tend to get low premium and high deductible plans and then max out my HSA, then when I need care I tap into my HSA. My total spending over a 5 year period with tax consequences considered is a good value for me, but in the years when I need to use my insurance it is lackluster. I can’t see the future though, so I pick my plan based on the arch of time.
You may think plan choice is simple but it is not. That is why I’m writing about this in May. You won’t need to pick your plan until November, but if you start thinking about it now, you just might be ready to make the perfect choice when open enrollment rolls around.
Good luck shopping and feel free to ask questions.