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Small Business Employee Benefits and HR Blog

Will the Marketplaces Add 'Copper' Plans in 2016?

August 27, 2014

The Affordable Care Act (ACA) requires health insurance plans available in the individual and small group Marketplaces to meet certain actuarial value levels. Marketplace plans provide four standard levels of coverage, or “metallic tiers” of coverage. These tiers were intended to allow consumers to compare plans with different levels of coverage for essential health benefits (EHB). Currently, there are bronze, silver, gold and platinum plans. Last month, a group of U.S. senators and insurers proposed adding a “copper” plan to the bottom of the metallic tiers.

Background on the Metallic Tiers

In the past, it was hard to understand the coverage levels of plans. That’s no longer the case. As of 2014, individual health insurance plans are categorized in four standardized levels of coverage, called “metallic tiers of coverage.” These categories help to better compare plans “apples to apples.”

  • The bronze plan has an actuarial value of 60 percent. Individuals will be required to pay 40 percent of their expected medical expenses via deductibles, co-payments, and coinsurance.

  • The silver plan has an actuarial value of 70 percent. Individuals will be required to pay 30 percent of their expected medical expenses via deductibles, co-payments, and coinsurance.

  • The gold plan has an actuarial value of 80 percent. Individuals will be required to pay 20 percent of their expected medical expenses via deductibles, co-payments, and coinsurance.

  • The platinum plan has an actuarial value of 90 percent. Individuals will be required to pay 10 percent of their expected medical expenses via deductibles, co-payments, and coinsurance.Metallic_tier_plans

Why Introduce a Copper Plan?

The idea behind the introduction of a copper plan is to try and attract individuals who have not purchased health insurance yet due to the cost. Additionally, proposers of the copper plan argue that introducing a copper tier may encourage individuals who have already enrolled in a Marketplace plan to re-assess their healthcare options for 2015.

The proposed copper plans would be situated at the bottom of the metallic tier (below bronze). The plans would have a significantly lower premium, but would cover only 50 percent of an individual's expected medical expenses. This leaves the individual responsible for the remaining 50 percent via deductibles, co-payments, and coinsurance.

Although introducing a plan with a lower premium may seem like an attractive idea to some (consumers, insurers, and proposers of the plan), others are arguing differently. Opposers of the introduction of a copper plan point out that although the premium may be more affordable, if an individual ever had to use their plan, they could get stuck with an extremely costly deductible.

Other opposers of the copper plan argue that a low-premium high-deductible plan would not have the appeal that copper plan proposers intend. Only 20 percent of Marketplace enrollees selected a bronze plan. Of the Marketplace enrollees, 65 percent selected a silver plan, which was by far the most popular.

Since the average Marketplace plan only costs $82 a month when premium tax credits are taken into account, a low-premium high-deductible plan may seem less appealing to enrollees than anticipated.

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What do you think about the introduction of a copper plan into the metallic tiers? Leave a comment below.

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