What to Know About Gold Plan Health Insurance

A gold plan is a type of individual/family or small group health insurance that pays, on average, 80% of covered healthcare expenses for a standard population.

Plan members pay the other 20% of healthcare expenses with their copayments, coinsurance, and deductible payments (as described below, this is across a standard population; a specific individual's cost-sharing can be much more or much less than 20% of the costs).

This article will explain what you need to know about gold plans, and tips for deciding which metal level plan will best fit your needs.

To make it easy to compare the value you’re getting for the money you spend on health insurance premiums, the Affordable Care Act (ACA) created new coverage categories for individual/family and small group plans (but not for large group plans or self-insured health plans).

Individual/family and small group health plans are divided into levels, or tiers—platinum, gold, silver, and bronze—based on their actuarial value.

All of the health plans of a given level offer roughly the same overall value. For gold-tier plans, the value is 80%. Platinum plans offer a 90% value, silver a 70% value (unless the plan is enhanced with cost-sharing reduction subsidies), and bronze a 60% value.

In each case, there's an acceptable actuarial value de minimis range of -2/+2 for silver, gold, and platinum plans, and -2/+5 for bronze plans (with the +5 applicable to expanded bronze plans).

However, for plans sold in the individual/family market, the acceptable range for silver-level plans is tighter, at -0/+2, and just -0/+1 for silver-level plans with built-in cost-sharing reductions.

Although the ACA called for the creation of health plans at all four metal levels, there are very few platinum plans available for people who purchase their own coverage in the individual market (ie, through the exchange or directly from an insurer, as opposed to getting their coverage from an employer). Most of the plans available in the individual market are bronze, silver, or gold.

What Does Health Insurance Value Mean?

The actuarial value tells you what percentage of covered healthcare expenses a plan is expected to pay for its membership as a whole. This doesn’t mean that you, personally, will have exactly 80% of your healthcare costs paid by your gold plan (or within the allowable gold plan range of 78-82%).

You might have more or less than 80% of your expenses paid depending on how you use your gold health plan.

This is best illustrated with an example: Consider a person with a gold plan who only has one doctor visit during the year, and some lab work. Perhaps their copay is $35 per visit, and their insurance pays another $100 for the office visit.

But the lab work is counted towards the deductible, so the patient has to pay the full bill, which ends up being $145 after the network negotiated discount. When it's all said and done, they've paid $180, and their insurance has paid $100. So their insurance only paid about 36% of their costs ($100 out of a total of $280).

But now consider the same person, with the same gold plan, developing cancer during the year. They have several office visits at $35 each, meet their $2,500 deductible soon after the diagnosis, and hit their $3,500 out-of-pocket maximum before they even start chemo.

After that, the health plan pays for everything, as long as they stay in-network. At the end of the year, the insurance plan has paid $230,000 and the patient has paid $3,500. So the insurance has covered more than 98% of the total costs.

In both cases, it's the same gold plan, and it pays an average of 80% of covered medical costs across a standard population. But as the above examples show, the percentage of each member's costs that are covered will depend entirely on how much medical care that particular member needs, and will thus vary considerably from one person to another.

How Is Actuarial Value Calculated?

There is an actuarial value calculator, updated annually by the federal government, that health plan actuaries use to determine the actuarial value of individual and small-group health plans. The actuarial value calculator only considers in-network care for essential health benefits when determining the actuarial value of a plan.

Things your health insurance doesn’t cover at all aren’t taken into account when determining a health plan’s value. For example, if your gold-tier health plan doesn’t pay for bariatric surgery or infertility treatments, the cost of those things isn’t included when calculating your plan’s value.

Things your health plan covers without any cost-sharing are included. So, the free birth control and preventive care your health plan provides are included when your plan’s value is determined.

Just like other health plans, the maximum allowable out-of-pocket for a gold plan is capped at $9,450 for a single person in 2024. But gold plans often have out-of-pocket limits that are lower than the allowable maximum, which is part of what makes it possible for them to hit the 80% target actuarial value.

The specifics will vary for each plan, as there is a wide range of plan designs that will allow a plan to fall in the allowable actuarial value range to be considered a gold plan.

What Will You Have to Pay?

You’ll pay monthly premiums for the health plan. Gold plan premiums tend to be more expensive than plans with lower actuarial value because gold plans pay more toward your healthcare bills than silver or bronze plans do. Gold plan premiums will usually be cheaper than platinum plan premiums because gold plans pay a lower percentage of healthcare expenses than platinum plans pay.

But those intuitive pricing guidelines don't necessarily apply anymore in the individual market. The normal pricing scale—bronze plans generally being least expensive, followed by silver, then gold, then platinum—hasn't necessarily held true in recent years.

Because the cost of cost-sharing reductions (CSR) has been added to silver plan premiums in most states since 2018, it's possible to find gold plans in many areas that are less expensive than silver plans. This does not apply in the small group market, however, because CSR benefits aren't available on small group plans (so insurers haven't had to add the cost of CSR to group health insurance premiums).

In addition to premiums, you’ll also have to pay cost-sharing like deductibles, coinsurance, and copays when you use your health insurance. How each plan makes members pay their 20% share of overall healthcare expenses will vary. For example, one gold plan might have a high $2,500 deductible paired with a low 10% coinsurance. A competing gold plan might have a lower deductible paired with a higher coinsurance or more copays.

Why Choose a Gold Plan?

In choosing a health plan, if you don’t mind paying higher premiums to have a greater percentage of your healthcare costs paid by your health insurer, a gold-tier plan might be a good choice for you. If the idea of having to pay lower out-of-pocket costs when you use your health plan—in trade for potentially higher premiums—appeals to you, then a gold plan could be a good match.

Gold plans are likely to appeal to people who expect to use their health insurance, who fear being responsible for high out-of-pocket costs when they need care, or who can afford to pay a bit more each month for a little extra peace of mind than they’d have with a silver or bronze plan.

But as noted above, it may make more sense for individual market shoppers in some areas to buy a gold plan simply because it's less expensive than a silver plan, despite offering better coverage. This has been the case since 2018, when the cost of CSR started to be added to silver plan premiums, resulting in disproportionately large premiums for silver plans.

(Note that for people who are eligible for cost-sharing reductions and earn no more than 200% of the poverty level, the available silver plans in the exchange will be modified to have actuarial value well above 80%, meaning that they'll provide more robust coverage than gold plans; this is discussed in more detail below).

This pricing structure—which results in gold plans priced lower than silver plans in some areas—could continue indefinitely unless regulations change to prevent insurers from adding the cost of cost-sharing reductions to silver plan premiums. For the time being, silver plan premiums are likely to continue to be disproportionately large (which also results in disproportionately large premium subsidies).

For people who qualify for cost-sharing reductions, the silver plan is likely to provide a better value, especially since silver plans have actuarial value well above 80% for CSR recipients whose income doesn't exceed 200% of the poverty level: If household income is up to 150% of the poverty level, the available silver plans will have an actuarial value of 94% (and the two lowest-cost silver plans will be premium-free, at least through 2025). If household income is between 151% and 200% of the poverty level, the available silver plans will have an actuarial value of 87%.

But for people who don't qualify for cost-sharing reductions (ie, their income is above 250% of the poverty level, or $36,450 for a single individual buying 2024 coverage in the continental U.S.), a gold plan will provide better coverage and may have lower premiums, depending on the area.

(Note that although CSR benefits are available to applicants with income up to 250% of the poverty level, the benefits are strongest for those whose income doesn't exceed 200% of the poverty level. Between 200% and 250%, the CSR benefits only increase a silver plan's actuarial value to 73%, which is a very modest increase.)

If you work for a small employer that offers a gold plan option in addition to plans at other metal levels, you'll need to compare the options side-by-side to see which one will work best for your situation.

The cost of CSR is not a factor in the employer-sponsored market, as CSR is not provided on group health plans. So gold employer-sponsored plans will generally tend to be more expensive than bronze and silver plans, but less expensive than platinum plans offered by the same insurer (across multiple insurers, however, costs vary considerably; Insurer A might have a gold plan that's less expensive than Insurer B's bronze plans).

Why Not Choose a Gold Pan?

Don’t choose a gold-tier health plan if a low monthly premium is the most important factor to you. You’re likely to have lower premiums if you choose a silver or bronze plan, instead (except, as noted above, in situations where a gold plan ends up costing less than a silver plan due to the cost of CSR being added to silver plan premiums).

If you’re eligible for cost-sharing subsidies because your income is 250% of the federal poverty level or lower, you’re only eligible for the cost-sharing subsidies if you choose a silver-tier plan and buy it on your state's health insurance exchange (Marketplace). Even if your income is low enough to qualify, you won’t get the cost-sharing subsidies if you choose a gold plan.

Cost-sharing subsidies make your deductible, copays, and coinsurance lower so you pay less when using your health insurance. In effect, a cost-sharing subsidy will increase the value of your health plan without raising the monthly premiums.

It’s like getting a free upgrade on health insurance. If you choose a silver plan rather than a gold plan, your cost-sharing subsidy could help you get the same value you would have gotten with a gold or platinum plan, but for the lower premiums of a silver plan. You won’t get the free upgrade if you choose a gold tier plan.

Summary

A gold plan is an individual/family or small group health plan that has an actuarial value of roughly 80%. This means that across a standard population, the health plan will pay for approximately 80% of medical costs, while members pay the other 20% via copays, deductibles, and coinsurance. Gold plans can be purchased through the exchange/Marketplace in each state, or directly from an insurance company (ie, "off-exchange" without any financial assistance). Small businesses can also purchase gold plans for their employees.

A Word From Verywell

If you're purchasing your own health insurance through the exchange in your state, gold plans will be among the options available to you. These plans can be a great choice if you're not eligible for cost-sharing reductions (which are only available on silver plans). And in some areas, you might find that some gold plans are less expensive than silver plans, which can make them a particularly good value. But if your income is relatively low (especially if it's lower than about $29,000 for a single person), you might find that a silver plan is a better value. There's no one-size-fits-all, so be sure to carefully compare the available plans before making a selection.