Benefit Tiers
Within the individual insurance market, the ACA specified four levels of benefits (bronze, silver, gold, platinum) plus a catastrophic option for people under age 35. Actuaries in an insurance firm would specify the aver- age claims cost of an enrollee. If you bought a bronze plan and had a claim, the plan would pay 60 percent of the cost and you would be responsible for the remaining 40 percent. If you wanted more generous coverage you could buy a silver, gold, or platinum plan, being responsible for 30, 20, and 10 percent of the claims costs, respectively. Obviously, more generous plans cost more. One advantage of this tiering is that one can relatively eas- ily compare plans offered by different insurers because they have identical coverage.
Insurers can offer several plans in a benefit tier—each with differing deductibles, copays, and provider networks. One of the key issues that has arisen with benefit tiers is that insurers have narrowed their networks of pro- viders, often eliminating PPO plans and only offering HMOs.
