What Is a Silver Plan Under the Affordable Care Act?

In the individual/family and small group health insurance markets, a silver health plan pays, on average, roughly 70% of enrollees' healthcare expenses (but significantly more if the enrollee is eligible for cost-sharing subsidies, described below). The enrollees pay the other 30% of their healthcare expenses in the form of copayments, coinsurance and deductibles.

This article will explain how silver plans work, how they compare with other plans, and tips for deciding which metal level will best fit your needs and budget.

When a silver plan pays roughly 70% of medical costs for a standard population, this means it has a 70% actuarial value, or AV.

But this doesn't mean that you, personally, will get 70% of your healthcare costs paid by your silver plan. Rather, the plan pays 70% of the average costs for a standard population. But they'll pay a far lower percentage of total costs for a healthy enrollee with very little healthcare utilization, while they'll end up paying far more than 70% of total costs for a very sick enrollee who racks up a million dollars in claims. 

Note that while a silver plan will have an AV of roughly 70%, there's an allowable de minimus range, since it would be very challenging for health insurers to design plans that hit exactly 70% AV. The de minimus range has changed over time: Federal rules implemented in 2017 created a wider range. But that was changed with new rules that took effect in 2023, tightening up the range.

As of 2023, silver plans in the small group market can have AVs in the range of 68% to 72%. But in the individual market, the AV for silver plans is required to be between 70% and 72%. And for silver plans with built-in cost-sharing reductions (described in more detail below), the AV can only deviate by one point above the target number, and cannot be below it.

Non-covered healthcare expenses don’t count when determining a health plan’s value. For example, if your silver-tier health plan doesn’t provide coverage for infertility treatments or vasectomies, the cost of them will not be included when calculating your plan’s value.

Out-of-network services also don't count, and neither does care that doesn't fall under the ACA's definition of essential health benefits.

The Affordable Care Act's Standardized Value Levels

To make it easy for you to compare the value you’re getting for the money you spend on health insurance premiums, the Affordable Care Act standardized value levels for health plans in the individual and small group markets. These levels, or tiers, are:

• Bronze
• Silver
• Gold
• Platinum

In addition, in the individual market, catastrophic plans are available to people under the age of 30 and to people who qualify for a hardship exemption from the ACA's individual mandate.

This classification system applies to plans sold in each state's health insurance exchange, but they also apply to all individual and small group major medical health insurance sold anywhere in the US, including outside the exchanges.

Health plans that aren't ACA-compliant (and that don't fit into one of those benefit categories) can no longer be sold in the individual major medical market, even outside the exchange.

Excepted benefit plans, however, are not subject to ACA regulations and the metal level classifications do not apply to these types of coverage. Examples of excepted benefits include vision and dental plans, short-term health insurance plans, fixed indemnity plans, critical illness plans, and accident supplements. These types of coverage are not subject to ACA rules and do not have metal-level classifications.

There are also other types of coverage that are not subject to ACA regulations, including disability insurance, Medicare Supplement (Medigap) insurance, and long-term care insurance. Metal level classifications also do not apply to large group health plans or self-insured plans, even though some of the ACA's regulations do apply to these plans.

What Will I Have to Pay With a Silver Plan?

Premiums

If you have a small group silver plan offered by an employer, your premiums will depend on how much of the cost is subsidized by your employer. And if you buy your own individual/family silver plan, your premium will depend on your income, as income-based subsidies are available to most enrollees.

(Keep in mind that you do have to enroll through the Marketplace/exchange—either directly or via an enhanced direct enrollment entity—to get a subsidy. If you enroll outside the exchange, you'll pay full price.)

Silver plan premiums tend to be less expensive than gold or platinum-tier plans since silver plans expect to pay out less toward your healthcare bills (unless you're eligible for cost-sharing reduction subsidies, described below). But rates vary considerably from one insurer to another, and you'll often find that one company's silver plans might be more expensive than another company's gold plans.

In the individual market, you might find a significant number of gold plans that are less expensive than silver plans, due to the way the cost of cost-sharing reductions is now being added to silver plan rates in most states.

Depending on your income, you might also find that you're eligible for premium-free bronze, gold, and even silver plans. From 2021 through 2025, the American Rescue Plan and Inflation Reduction Act have reduced the percentage of income that people have to pay for the second-lowest-cost silver plan (the benchmark plan), lowering it to 0% for enrollees with fairly low incomes. But even at higher incomes, a bronze plan, or even a gold plan, might be available with no monthly premiums.

Even before the American Rescue Plan was enacted, some people were eligible for premium-free bronze plans, and in some areas, premium-free gold plans, due to the way states have handled the loss of federal funding for cost-sharing reductions.

That has resulted in disproportionately larger premiums for silver plans, and thus disproportionately large premium subsidies in most states (there are a couple of states where insurers have taken a different approach to the cost of CSR and premium subsidies are not disproportionately large).

But although premium-free plans were available for some people in some areas before the American Rescue Plan, they generally weren't silver plans. The American Rescue Plan changed that, making premium-free silver plans available to many marketplace enrollees.

Cost-sharing

In addition to your monthly premiums, each time you use your health insurance, you’ll have to pay cost-sharing like deductibles, coinsurance, and copays.

How each silver plan makes you pay your share of the costs will vary. For example, one silver plan might have a $4,000 deductible paired with a 20% coinsurance. A competing silver plan might have a lower $2,000 deductible, but pair it with a higher coinsurance and a $40 copay for brand-name prescriptions.

Regardless of the plan design, your total out-of-pocket costs for covered, in-network care will not exceed $9,450 in 2024, as that's the maximum that's allowed under federal rules.

Some people who purchase individual market coverage in the exchange, and who meet certain household income requirements (no more than 250% of the poverty level), can receive cost-sharing reductions if they choose a silver plan.

People who are eligible for cost-sharing reductions benefit from lower deductibles, lower copayments and coinsurance, and lower out-of-pocket maximums, as long as they pick a silver plan.

For lower-income enrollees, cost-sharing reductions result in AV being increased to as much as 94%, making it better coverage than a platinum plan—at no additional cost to the enrollee.

From 2014 through most of 2017, the federal government paid the insurers to provide this benefit. That funding stopped in late 2017, and insurers now incorporate the cost into the premiums they charge (as noted above, the cost is only added to silver plan premiums in most states).

You can only get the cost-sharing reduction benefit if you:

• have a household income of no more than 250% of the prior year's federal poverty level (This is based on your projected income for the year the plan will be in effect, compared with the prior year's federal poverty level. So for 2024 coverage, the person's projected 2024 income is compared with the 2023 poverty level numbers to determine the percentage.)
• are not eligible for affordable employer-sponsored health insurance that provides minimum value
• are legally present in the US, not incarcerated, not enrolled in Medicare, and not eligible for Medicaid, CHIP, or premium-free Medicare Part A.
• enroll in a silver plan through the Marketplace/exchange in your state.

Why Should I Choose a Silver Plan?

Choose a silver health plan if you:

• Are looking to balance the cost of your monthly premiums with the cost of your out-of-pocket expenses. 
• Want to avoid the high premium costs of gold and platinum plans, but also want to protect yourself from the possibility of having to pay the higher deductibles that generally come with bronze plans (keeping in mind that because of the way the cost of CSR is being added to silver plan premiums in most states, it's fairly common to see silver plan rates that are much higher than bronze plan rates and also higher than gold plan rates in some areas).
• Are eligible for cost-sharing reductions (CSR), because you must choose a silver-tier plan to get the subsidies. This is one of the most important reasons to pick a silver plan. If your income doesn't exceed 250% of the poverty level (and particularly if it doesn't exceed 200% of the poverty level, as CSR benefits are strongest below that level), a silver plan with CSR benefits will likely be the best value for you. This will reduce your deductible, copays, coinsurance, and out-of-pocket maximum so that you pay less when you use your health insurance. CSR increases the actuarial value of your health plan without raising the premium.

Why Should I Avoid a Silver Pan?

You shouldn’t choose a silver health plan if:

• You know that you'll incur at least modest medical expenses during the year and determine that gold or platinum plan with a lower out-of-pocket maximum will save you money, even when accounting for the higher premiums.
• You’re trying to limit your expenses each time you use your health insurance—again, a gold or platinum plan might be a better option if you're not eligible for cost-sharing reductions.
• If you use your health insurance a lot and know in advance your out-of-pocket expenses will exceed the out-of-pocket maximum, you might be able to save money by choosing a bronze-tier plan with a similar out-of-pocket maximum but lower premiums. Your total yearly out-of-pocket expenses will be the same, but you’ll pay less for premiums. You can read more about how this technique works in, “How To Save on Health Insurance if You Reach the Out-Of-Pocket Maximum.”
• You don't qualify for cost-sharing reductions and anticipate very little in healthcare costs during the coming year. A bronze plan might be your best option, as it will have lower premiums than a silver plan, in trade for less-robust coverage.
• You don't qualify for premium subsidies and want to minimize your premiums. In most states, the cost of CSR has been added to silver plan premiums. In some states, this applies to all silver plan rates, including plans sold outside the exchange (assuming the insurer has at least some plans available in the exchange). In other states, it applies only to plans sold in the exchange. But if you don't qualify for premium subsidies and you pick a silver plan purchased in the exchange, there's a good chance that you're paying an additional premium to cover the cost of cost-sharing reductions. In most states, you can avoid this by selecting a plan at a different metal level (or by selecting a silver plan sold outside the exchange—check with a broker or insurer in your area to see if this is an available option).

Summary

Under the ACA, health plans in the individual/family and small group market are categorized by metal level—bronze, silver, gold, and platinum—based on the percentage of medical costs that they cover for a standard population. Silver plans cover roughly 70% of costs, although this is only applicable to the entire standard population; for individual enrollees, the percentage of costs that the plan will cover varies considerably, depending on how much care the person needs.

Although standard silver plans cover roughly 70% of costs, individual/family silver plans offered in the health insurance exchange will cover a larger percentage of costs if the enrollee's household income doesn't exceed 250% of the poverty level. This is particularly true if household income doesn't exceed 200% of the poverty level.

A Word From Verywell

If you're shopping for health insurance in the exchange/marketplace in your state, you'll see the various plans designated by metal level. Although this helps to compare apples to apples, it isn't always intuitive. For example, you may find that many of the silver plans are priced higher than many of the gold plans. And if your income is modest, you may find that the available silver plans provide especially robust coverage. It's important to carefully compare the various options, without assuming anything in advance. And if you have questions, there are navigators and brokers who can provide free assistance.