What is actuarial value?

Written by: Gabrielle Smith
Published on July 26, 2021.

Beginning in 2014, the Affordable Care Act (ACA) began requiring health insurance plans in the individual and small group markets to meet certain levels of coverage, each assigned to a different metallic tier: Bronze, Silver, Gold, and Platinum.

These metal levels are defined by their “actuarial value” and are intended to allow healthcare consumers to compare plans with different levels of coverage for essential health benefits.

But what exactly does actuarial value mean, and how does it change how you shop for a health plan on the exchanges? In this article, we’ll cover everything you need to know about actuarial value, how health insurance plans are categorized, and how to choose a plan that’s best for you.

First time shopping for health insurance? Watch our video for the top terms you need to know

How is actuarial value defined?

Actuarial value (AV) is simply a set percentage that a health insurance plan will pay for the total average costs of covered benefits under that plan.

For example, an insurer offering a plan with a 70% AV would be expected to pay 70% of a standard population’s expected medical expenses for essential health benefits. In turn, the individuals covered by the plan would be expected to pay the remaining 30% of the expected expenses in the form of deductibles, copayments, and coinsurance.

Which plans have more actuarial value?

Each metallic tier has varying levels of AV. The chart below breaks down each plan type and it’s AV percentage:

Plan type










It’s important to note that while each plan covers a different percentage of costs, all of them cover the ten essential health benefits outlined by the ACA, including prescription drugs, hospitalization, outpatient care, and more.

AV only determines how much you’ll pay for your health plan—not the quality or amount of care you’re eligible to receive.

How do I know which health plan is right for me?

Deciding if you need a health plan with a higher or lower AV will depend on the amount of healthcare expenses you expect to incur in a given year.

Here are just a few questions to ask yourself to help you decide which plan is best for you:

  • Do I plan to visit the doctor often?
  • Do I take prescription drugs that need frequent refills?
  • Do I have a disease or chronic illness that requires more care?
  • Do I have a high-risk job that makes me more prone to accidents?

If you answered “yes” to at least a few of these questions, then it’s likely you’ll want a health plan with a higher AV, such as a Platinum or Gold plan. However, if you answered “no” to more of these questions, you may only need a plan for the worst-case scenario, and might choose a plan with a lower AV, such as a Bronze or Silver plan.

Are there other ways to get my healthcare costs covered?

Getting your healthcare costs partially covered through an insurer is a great first step to affording your medical expenses, but it’s not the only way.

If your employer offers a health reimbursement arrangement (HRA), you can get over 200 eligible medical expenses reimbursed—tax-free—through your organization.

With an HRA, your employer will offer a monthly allowance for you to spend on the qualifying medical expenses you, your spouse, and your dependents need each month. What’s more, you can also get your individual health insurance premium reimbursed, helping you save even more on your healthcare.

Watch our webinar to see how an HRA works for employees


If you’re new to the health insurance exchanges, it can seem tricky navigating all of the different plan types. However, understanding how actuarial value works and the differences between each of the metal tiers outlined in this article will help you choose a plan that’s right for you and your family.

This article was originally written on December 20, 2012. It was last updated July 26, 2021.

Originally published on July 26, 2021. Last updated July 26, 2021.


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