It’s gold, it must be the best, right? Yes, no, and maybe – best is always in the eye of the beholder!
First – Gold plans have a higher actuarial value than either Silver or Bronze plans – but a lower actuarial value than Platinum plans. So, what the heck does that mean? Actuarial value is the ratio of what the insurance company expects to pay compared to what you are expected to pay. It’s not a perfect ratio but a Gold plan has an actuarial value of 80/20. Meaning the insurance company pays 80% of the covered costs and you are expected to pay 20%. This is an averaged amount – the insurance company expects the ratio to work out overall but there are clear exceptions. If you have a $20 copay for a doctor’s office visit and your doctor actually gets paid a total of $200 then you are only paying 10%. If that is the only service you use all year, it obviously doesn’t average out – but statistically, over the entire group of people with this plan, it will work out for the insurance company.
Second – Your mileage can vary – a LOT. The Cost Share Reduction that only works with Silver level plans (and that not everyone receives) can make a lower cost Silver plan act very much like its more expensive Gold cousin. Gold plans normally have lower deductibles and higher premiums than Silver – but a CSR can reduce the deductible on the Silver plan to an amount as low if not lower than the higher priced Gold plan. If you have a CSR, the extra amount you’d pay toward a Gold plan may not be worth it – because you can get nearly identical – if not better – coverage from a Silver plan with a lower premium.
Third – That attractive zero deductible isn’t necessarily important. Now, hold on before you have a cow – here the devil is in the details. If your Gold plan has straight copays – meaning that you only pay a copay when you use a service – and they all pay before deductible, the zero deductible has no real effect. The first time you go to the doctor, you pay the copay. Assuming your Maximum Out of Pocket is not met, you pay exactly the same copay on your last doctor visit. If you have a zero deductible and your copay starts after deductible then technically, the deductible did you a service – since a zero deductible is met automatically, you go straight to copay – but it’s semantics. It has no practical difference from a straight copay.
Fourth – The Maximum Out of Pocket is ALWAYS important. Here’s where a gold plan can pay off despite the higher premium – if you know you are going to be using your insurance (you have an upcoming surgery, treatment or are on a lot of medications, et al) then that low maximum out of pocket may save you money despite the higher premium. The same can be true of a Silver plan with a Cost Share Reduction – make sure to look carefully at your available options. But if you don’t have a CSR and do have a lot of medical expenses, the Gold plan can easily end up paying for itself.
Whether or not Gold is right for you depends on both your finances and your needs – but for some folks, a Gold plan will prove to be the least expensive, best option. Do your homework and check your math!