Bronze Health Insurance Plans
A bronze health plan is a type of health insurance that pays, on average, 60 percent of average enrollees’ health care expenses (but this is an average across a standard population—the percentage of your costs that the plan covers will vary tremendously depending on whether you need a lot of medical care during the year, or not much at all). The enrollees pay the other 40 percent of their total health care expenses in the form of copayments, coinsurance, and deductibles.
The determination of whether a plan fits into the bronze level of coverage is based on actuarial value, explained here in more detail. Bronze plans are available in both the individual and small group health insurance markets, in the exchange or outside the exchange.
How to Compare Plans
To make it easy to compare how much value you’re getting for the money you spend on health insurance premiums, the Affordable Care Act standardized value levels for individual and small group health plans into four tiers. These tiers are bronze, silver, gold, and platinum.
All of the health plans of a given tier offer the same overall value, although they can fluctuate within a +2/-4 range (this range began to apply as of 2018; in previous years, it was +2/-2). And bronze plans have a wider de minimus range of +5/-4, which was part of the market stabilization rule that HHS finalized in April 2017.
For bronze-tier plans, the average actuarial value is roughly 60 percent. But with the allowable de minimus range, plans with actuarial values of 56 percent to 65 percent are considered bronze plans. So although the ACA’s metal level designations do help in terms of making it easier to make general comparisons among plans, it’s still important to look at the fine print, as two bronze plans can have quite different benefit designs and coverage levels.
What Value Means
Value, or actuarial value, tells you what percentage of covered health care expenses a plan would be expected to cover for an entire standard population. This doesn’t mean that you, personally, will have exactly 60 percent of your health care costs paid by your bronze plan. Depending on how you use your health insurance, you might have a lot more or less than 60 percent of your expenses paid.
A person with very high health care costs will obviously pay far less than 40 percent of the total costs because the plan’s out-of-pocket maximum will limit the amount the member pays. On the other hand, a person with very low overall expenses can expect to pay far more than 40 percent of the total costs, since he or she might not even meet the deductible for the year. This is explained in more detail here.
Non-covered health care expenses aren’t taken into account when determining a health plan’s value. Out-of-network costs also are not counted, and neither are costs for treatment that doesn’t fall into the ACA’s essential health benefits categories.
What You Will Have to Pay
You’ll have to pay monthly premiums for the health plan. You’ll also have to pay cost sharing like deductibles, coinsurance, and copays when you use your health insurance. Bronze plan monthly premiums tend to be cheaper than higher value plans because bronze plans expect to pay less money toward your health care bills.
If you buy your coverage in the health insurance exchange in your state and you’re eligible for premium subsidies, you might find that you can get a bronze plan for free after your subsidy is applied. This is due to the way insurers have added the cost of cost-sharing reductions to silver plan premiums in most states. Since subsidy amounts are based on the cost of the second-lowest-cost silver plan, the higher premiums for silver plans result in larger premium subsidies. Since those subsidies can also be applied to bronze or gold plans, they’re sometimes large enough to cover the entire premium, leaving the enrollee with no monthly premium.
How each plan makes you pay your share of your health care expenses will vary. For example, one bronze plan might have a high-end $7,500 deductible paired with a low 10 percent coinsurance. A competing bronze plan might have a lower $5,000 deductible paired with a higher 35 percent coinsurance and a $45 copay for office visits (all ACA-compliant individual and small group plans have upper limits on total out-of-pocket costs that apply regardless of the metal level; no plans can have individual out-of-pocket limits—including deductible, copay, and coinsurance—in excess of $7,900 in 2019).
Reasons to Choose a Bronze Plan
In choosing a health plan, if the most important factor to you is a low monthly premium, a bronze-tier health plan can be a good choice. If you don’t expect to use your health insurance much or if the high cost-sharing inherent in a bronze plan doesn’t concern you, a bronze health plan might fit the bill.
If you’re under 30 (or 30+ with a hardship exemption from the ACA’s individual mandate) and aren’t eligible for premium subsidies, you might find that a catastrophic plan offers an even lower monthly premium, along with a slightly lower actuarial value (catastrophic plans don’t have actuarial value targets the way metal level plans do; they must simply have actuarial values under 60 percent, although they must also cover three primary care visits per year and adhere to the same upper limits on out-of-pocket costs as other plans).
If you’re 30 or older, though, you won’t be able to buy a catastrophic plan unless you have a hardship exemption from the ACA’s individual mandate. And premium subsidies can’t be applied to catastrophic plans, which makes them a poor choice for most people who are eligible for premium subsidies.
Reasons Not to Choose a Bronze Plan
Don’t choose a bronze-tier health plan if you want a plan that pays for most of your health care expenses. If you expect to use your health insurance a lot, or you can’t afford high copays, coinsurance, and deductibles, a bronze plan might not be for you.
Don’t assume, however, that a bronze plan is a bad choice if you know you’re going to need extensive medical care. In some cases, the total expenses (out-of-pocket costs plus premiums) end up being lower with a bronze plan, even when the enrollee has to meet the full out-of-pocket maximum for the year. You’ll want to run the numbers before you make a decision.
If you’re eligible for cost-sharing subsidies because your income is 250 percent of federal poverty level or lower, you can only get the cost-sharing subsidies if you choose a silver-tier plan. You won’t get the cost-sharing subsidies you qualify for if you choose a bronze plan.
Cost-sharing subsidies make your deductible, co-pays, and coinsurance lower so you pay less when you use your health insurance. In effect, a cost-sharing subsidy will increase the value of your health plan without raising the monthly premiums. It’s like getting a free upgrade on value. You won’t get the free upgrade if you choose a bronze plan.
- Federal Register. Patient Protection and Affordable Care Act, Notice of Benefit and Payment Parameters for 2019. April 17, 2018
- American Academy of Actuaries. Actuarial Value for Health Insurance Consumers. April 1, 2013.
- Department of Health and Human Services. Patient Protection and Affordable Care Act, Market Stabilization. April 2017.
- Federal Register. Patient Protection and Affordable Care Act; HHS Notice of Benefit and Payment Parameters for 2018; Amendments to Special Enrollment Periods and the Consumer Operated and Oriented Plan Program. December 22, 2016.