Silver Plan – Affordable Care Act (Obamacare)
- What is the silver plan?
- What are the silver plan's out-of-pocket costs?
- Tax credit for individuals & families
- Silver plan premiums
- Silver plan enrollment numbers
- Silver Plans On-Exchange vs. Off-Exchange
- Average out-of-pocket costs for silver plans on the small business market
- Frequently asked questions
What Is the Silver Plan?
The Affordable Care Act, sometimes called the ACA, defines four new types of health insurance plans for individuals and families. The four types of plans, ranked from most expensive out-of-pocket costs for consumers to least expensive, are: Bronze, Silver, Gold, and Platinum. All of these plans will offer the same minimum of benefits. These minimum benefits are determined by the federal and state government and must be included in a plan regardless of any additional benefits the plan decides to include.
For an insurance company to participate in an exchange, i.e. a state-run marketplace offering Affordable Care Act plans, the company does not have to offer all four kinds of plans, but it must offer at least a Silver Plan and also a Gold Plan.
Silver Plans have lower out-of-pocket costs than Bronze Plans but higher out- of-pocket costs than both Gold and Platinum Plans. All Silver Plans share the same minimum health benefits, but the way they charge out-of-pocket costs can differ significantly.
What Are The Silver Plan’s Out-of-Pocket Costs?
Based on an average person’s expected use of healthcare services, Silver Plans have the insurance company pay 70% of covered healthcare expenses. The remaining 30% of expenses are paid out-of-pocket by the policyholder. These out-of-pocket expenses include deductibles, copayments, and coinsurance. However, the plan’s monthly premium is not included as one of these out-of-pocket costs.
|Cost-Sharing Category||Average for a Silver Plan|
|Deductible for an individual enrollee||$2,927|
|Deductible for a family||$6,010|
|Generic drugs||$13 (2014 data)|
|Preferred brand drugs||$47 (2014 data)|
|Non-preferred brand drugs||$89 (2014 data)|
|Specialty drugs||31% of specialty drug expense charged to patient as coinsurance fee (coinsurance fees used for specialty drugs in 62% of 2014 plans studied)|
|Annual cap on out-of-pocket costs for an individual||$5,775|
|Annual cap on out-of-pocket costs for a family||$11,555|
The table below illustrates how out-of-pocket costs can differ among three insurance companies that offer a Silver Plan.
|Silver Plan Example #1||Silver Plan Example #2||Silver Plan Example #3|
|Plan||Blue Cross & Blue Shield of Rhode Island - VantageBlue Direct 3000||Kaiser Foundation Health Plan - DHMO 2000/45 CA||Cigna - myCigna Health Flex 5000|
|Doctor Visit Fee||$20||$45||$30|
|Coinsurance Fee||20% of cost||20% of cost||$0 (after deductible is paid)|
|Annual Limit on Out-of-Pocket Expenses||$6,350||$6,350||$5,000|
As you can see in the table, deductibles and coinsurance can vary significantly among Silver Plans. Even though both Silver Plan examples cover 70% of medical costs, this coverage applies to a typical enrollee population. Some individuals may receive more cost sharing and some less depending on the medical services used. The out-of-pocket costs also assume enrollees are using doctors and facilities approved by the plan. If you use a healthcare provider who is not approved, you could pay considerably higher costs, and those costs might not apply towards the maximum out-of-pocket expenses you can pay in a calendar year.
There are also special versions of Silver Plans with lower out-of-pocket costs for people whose income qualifies them for enrollment. These Silver Plans are known as Cost-Sharing Reduction" plans or CSR plans.
Tax Credit for Individuals & Families
The Affordable Care Act provides federal tax credits to people with middle incomes and low incomes whether they are buying individual or family insurance plans. The tax credit is based on the Silver Plan’s costs. If you are wondering what the tax credit is and how to determine if you are eligible then visit our Affordable Care Act Tax Credit page.
Silver Plan Premiums
Silver plans have the second lowest premium rates of the four new types of metal plans since they charge the second highest out-of-pocket costs. However, there may be instances where the Silver Plan of one insurance company may charge a lower premium than the Bronze Plan of another insurance company, as well as instances where the Gold or Platinum Plan of one insurance company may charge a lower premium than the Silver Plan of another insurance company. HealthPocket’s health insurance comparison tool allows people to compare all the plans available in their area.
Below are the average monthly premiums found for 30, 40, 50, and 60-year-old individuals in Silver plans across 34 different states.
|Age 30||Age 40||Age 50||Age 60|
Silver Plan Enrollment Numbers
The Department of Health and Human Services (HHS) released a report covering marketplace enrollment in May 2014. The report included enrollment data from October 1, 2013 to April 19, 2014 because although March 31, 2014 was the original enrollment deadline, some individuals qualified for a special enrollment period and selected plans after March 31st. 65% of individuals who selected a plan on either the Federally-facilitated marketplace (FFM) or a state-based marketplace (SBM) chose a silver plan. The availability of financial assistance, also known as health insurance subsidies or tax credits for Obamacare plans significantly influenced plan selection. 76% of individuals that selected a marketplace plan with financial assistance on the FFM chose a silver plan, whereas only a quarter of individuals who selected a marketplace plan without subsidies on the FFM chose a silver plan. 95% of individuals who selected a silver plan on the FFM will receive subsidies to help pay their premiums. With respect to gender, 71% of women and 67% of men chose a silver plan. The following table displays information on the age distribution of individuals who selected a silver marketplace plan. For each age group the percent of silver total represents the proportion of individuals who selected a silver plan that were in the age group. The percent of age group total represents the proportion of individuals in the age group who selected a silver plan.
|Age Group||Number of Individuals that Selected a Silver Plan on FFM||% of Silver Total||% of Age Group Total|
|Age Under 18||198852||5.00%||56.00%|
|Age 65 or Over||15663||0%*||75.00%|
*0% due to few seniors choosing a silver plan and rounding
Silver Plans On-Exchange vs. Off-Exchange
All metal plans including silver plans can be obtained on- or off-exchange. On-exchange refers to either the Federally-facilitated marketplace or a state-based marketplace, and off-exchange refers to a private insurance company. All metal plans, whether sold on- or off-exchange, must meet the Affordable Care Act’s essential health benefit requirements. Typically the benefits and cost-sharing for the same silver plan (plan with same name for the same individual and rating area) purchased on- or off-exchange are the same. Premiums for the same silver plan offered by the same insurer on- or off-exchange are also generally similar, if not the same.
HealthPocket conducted a study in June 2014 which compared metal plans sold on-exchange with metal plans sold by four major off-exchange insurers. The study examined the lowest available premiums for silver plans in the most populous cities in 39 states and found that on average the least expensive silver plan offered by the four off-exchange insurers were 39% more expensive than the silver plans with the lowest monthly premiums on-exchange. In 35 out of 39 cities (90%) the silver plan with the lowest premium was found on-exchange. The average monthly on-exchange silver plan premium for a 40-year old non-smoker was $253 and the average deductible for the lowest premium silver plan was $3,326. Out of all cities included in the study, residents of Minneapolis, Minnesota were offered a silver plan with the lowest monthly on-exchange premium ($154 with a deductible of $3,500). Residents of Bridgeport, Connecticut were offered a silver plan with the highest monthly on-exchange premium ($383 with a deductible of $3,000).
Average Out-of-Pocket Costs for Silver Plans on the Small Business Market
The Affordable Care Act caps the deductibles on small business health plans for individual enrollees at $2,000 and for families at $4,000. However, in February 2013 the Department of Health and Human Services determined that in order to maintain the appropriate percentage of out-of- pocket costs for enrollees, small group health insurance plans used by businesses and other organizations were allowed to exceed the deductible caps. HealthPocket found the following average out-of-pocket costs for silver plans in the small business market.
|Cost-sharing category||Average for a Silver Plan|
|Medical deductible for individual enrollee||$2,384|
|Medical deductible for family||$4,946|
|Primary care visit||$34|
|Annual cap on out-of-pocket costs for an individual||$5,690|
|Annual cap on out-of-pocket costs for a family||$11,445|
The average deductibles for Silver plans exceeded both the $2,000 individual and $4,000 family deductible caps.
Frequently Asked Questions
How are Silver Plans different than other Obamacare health plans?
The fundamental difference among the new Obamacare health plans is the percentage of covered medical costs paid by the health plan. The Silver Plan pays 70% of covered medical costs for a typical enrollee. Silver Plans are also the only metal plans which offer cost-sharing reduction (CSR) versions to consumers that require financial assistance for out-of-pocket costs.
How much does a Silver Plan cost?
The monthly premium for a Silver Plan depends on the insurer from whom you purchase the plan, the number of people to be insured by the plan, your age, whether you smoke, and the region in which you live. You can use HealthPocket’s comparison tool to compare Silver Plan premiums in your area.
When Can I Enroll in a Silver Plan?
The Open Enrollment period for the 2015 Affordable Care Act health plans begins November 15, 2014 and ends February 15, 2015. See our Open Enrollment article for more information.
What Is the Deductible Amount for a Silver Plan?
A deductible is the amount a consumer pays for covered medical services. HealthPocket found individual Silver plan medical deductibles were $2,927 on average in the individual and family market.
What does it mean when a Silver Plan is a benchmark plan?
A state insurance exchange uses the premium amount from a selected Silver Plan within the state to serve as the basis for subsidy calculations. The Silver Plan selected is the Silver Plan in the exchange with the second lowest premium. Even if a subsidy-eligible person chooses a Bronze, Gold, or Platinum plan, his or her subsidy amount is calculated based on the benchmark Silver Plan.
Do Silver Plans have more benefits than a Bronze Plan?
Silver Plans have the same benefit requirements as Bronze Plans. These benefit requirements are known as the Essential Health Benefits. An insurance company can choose to add benefits to a Silver Plan as well as any of the other new Affordable Care Act health plans. However, adding benefits is not required and does not distinguish a Silver Plan from a Bronze Plan, Gold Plan, or Platinum Plan.
Do Silver Plans cost more than Bronze Plans?
The answer is tricky. On average, Silver Plans should have higher premiums than Bronze Plans since Silver Plans pay a higher percentage of medical costs. However, prices vary among insurers and prices vary among regions so it is theoretically possible that there can be a specific Silver Plan that is less expensive than a specific Bronze Plan, but this is expected to be an exception rather than the rule.
Can I get a Cost-Sharing Reduction (CSR) health plan that is not a Silver Plan?
Will every insurer offer a Silver Plan?
On exchanges, every participating insurer offering products must include at least one Silver Plan and one Gold Plan. The same rules do not apply to carriers offering products outside of government exchanges.
If I qualify for a premium subsidy, do I have to purchase a Silver Plan?
No. You may apply your subsidy amount to any of the metal plans purchased on a state health insurance exchange. However, the premium subsidy amount is based on the benchmark Silver Plan.