Q. I’ve heard that the ACA’s premium subsidies are based on the cost of a Silver plan which pays for just 70% of average healthcare costs. I would like a Platinum plan – which covers 90% – but I also would like a subsidy. Is this possible?
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A. You can have both, if Platinum plans are available in your area (or if you’re eligible for robust cost-sharing reductions, as we’ll discuss in a moment). The size of the subsidy is based on the cost of a Silver plan, but you can apply it toward purchasing a Platinum policy – or a Bronze or Gold policy. The subsidy can be applied to any metal level, on-exchange plan, but not to catastrophic plans or off-exchange plans.
(Although premium subsidies can be used with a plan at any metal level, cost-sharing reductions, which are another type of ACA subsidy, are only available if you purchase a Silver plan. If you qualify for cost-sharing reductions, you’ll find that the available Silver plans have actuarial values that could range as high as 94%, which is better than a regular Platinum plan.)
If you buy a plan that’s more expensive than the second-lowest-cost Silver plan (the benchmark plan), you’ll pay more than the percentage of your income deemed “affordable” by the ACA. But for any metal-level plan you select, the total cost of the premium will still be reduced by the same amount of subsidy you’d have received if you had purchased the benchmark plan (unless the plan you select actually costs less than the amount of your subsidy; in that case, your subsidy will cover all or nearly all of the cost, but you can’t keep the additional subsidy dollars).
As an example, if the benchmark plan is $300/month and your subsidy amount based on that plan is $200/month, you can apply that $200/month to any Bronze, Silver, Gold, or Platinum plan available in the exchange. If you buy the benchmark plan, you’ll pay $100/month. If you buy a plan that retails for $500/month, you’ll pay $300/month. And if you buy a plan that retails for $225/month, you’ll pay just $25/month.
(Note that subsidies are larger than normal in 2021 and 2022, due to the American Rescue Plan. Those larger subsidies may or may not be extended by Congress to last into 2023 and future years.)
But depending on where you live, you may be limited to a Gold plan as the most robust option, as Platinum plans are only available in limited areas. To offer plans in the exchange, an insurer has to offer at least one Gold plan and one Silver plan, but Bronze and Platinum plans are not required. Bronze plans are offered in almost all areas, but Platinum plans have become much less common over time. So in most of the country, the available metal-level options are Bronze, Silver, and Gold plans.
During the open enrollment period for 2022 coverage, Platinum plans were only sold in the exchanges in 16 states. And enrollment in Platinum plans amounted to only 136,486 people, out of more than 14.5 million exchange enrollees nationwide.
