Silver plans are another one of four "metal" levels of coverage established by the Affordable Care Act. These plans have proven to be very popular. In fact, 70%† of enrollees chose a Silver plan during the 2015-2016 Open Enrollment. Silver plans tend to have affordable monthly insurance premiums. However, their out-of-pocket costs are still more expensive than a Gold or Platinum plan. Specifically, 70% of your medical expenses are paid for by a Silver plan, meaning that you will have to pay for the remaining 30% of these costs.
Example: For the arm surgery mentioned above that costs $20,000, your insurance would pay $14,000 and you would be responsible for the remaining $6,000. This is in addition to your monthly premiums. As we mentioned above, Silver plans are the only ones that are eligible for the Cost-Sharing Reduction, or when the government helps pay for out-of-pocket health care costs such as coinsurance, copayments, and deductibles. To qualify for the Silver plan’s Cost-Sharing Reductions, your income must be at or below 2.5x the Federal Poverty Line.
Silver plans are popular and could be the right choice if you:
- Are willing to pay a little more for a monthly premium so you can pay a little less out-of-pocket when using medical services.
- Anticipate needing some non-preventative medical services.
- Foresee taking some prescription medication.
- Or, you qualify for Cost-Sharing Reductions that lower your out-of-pocket costs. For those who qualify, many find that their total costs of health care tend to be much more affordable. Though they pay a monthly premium that is a little higher than a Bronze plan, the out-of-pocket costs are similar to those of a Gold plan and are much lower.
As with all four plans, your monthly premium could be lowered greatly if you qualify for the Premium Tax Credit. The Premium Tax Credit is like a discount that is paid for by the government and applied to your monthly insurance rate. The main factor in determining your eligibility is your annual household income. Depending on the state you live in, your income must be at or below 4x the Federal Poverty Line to qualify for the Premium Tax Credit.
Additionally, one of the reasons why Silver plans are so popular is that you can also get a similar discount on your out-of-pocket costs. Silver plans are the only ones that are eligible for the Cost-Sharing Reduction, or when the government helps pay for out-of-pocket health care costs such as coinsurance, copayments, and deductibles. To qualify for the Silver plan’s Cost-Sharing Reductions, your income must be at or below 2.5x the Federal Poverty Line.
Remember that the only difference among plans is the amount you pay, not the quality of health care you receive. By law, all four plans must meet the Ten Essential Health Benefits, which includes a free wellness visit and preventative care.
Keep in mind that under Obamacare, all plans have the same maximum out-of-pocket limits no matter which metal level you choose. These limits protect you financially, especially if you need a lot of medical care. For 2016, the annual limit is $6,850 for an individual, and $13,700 for a family, including deductibles. Silver plans pay for 70% percent of covered medical expenses before reaching the limit, and then 100% of all covered expenses after reaching the limit.
If you think you will need regular medical care, consider a Gold plan - especially if you do not qualify for Cost-Sharing Reductions. A Platinum plan could be an even better choice for those who need very frequent or major medical services.