Actuarial value
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Actuarial value refers to the percentage of total average costs for covered benefits that a plan will cover. The rating of an insurance plan on the health insurance exchanges is determined by the plan's actuarial value.[1][2]
Overview
The actuarial value of a plan is the overall average percentage of costs an insurance plan will pay for covered benefits. Actuarial value is based on the average cost sharing amounts of everyone enrolled in the plan, and so does not reflect an exact amount a plan will pay for services or its exact cost sharing amount. For example, a plan with an actuarial value of 70 percent would leave the insured responsible for 30 percent of their medical costs for covered benefits. As this is an average, the actual amount paid might be higher or lower, depending on the healthcare needs and terms of the plan.[1]
On the health insurance exchanges established under the Affordable Care Act, actuarial value is used to assign plans a metal level to signal to consumers how much of their health costs a plan will cover. Plans that offer an actuarial value of 70 percent are rated as silver plans on the marketplace. Plans of 60 percent actuarial value are rated as bronze, the minimum tier of coverage and the lowest actuarial value a plan may legally have for essential benefits. Plans with 80 percent and 90 percent actuarial value are rated gold and platinum, respectively.[2]
See also
- Obamacare overview
- History of healthcare policy in the United States
- Medical loss ratio
- Cost sharing
External links
Footnotes
