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Dewonkify – Actuarial Value (of health benefit plans)

The Word: Actuarial Value (of health plan benefits)

Definition:  Actuarial value outlines the percentage of medical costs that a health plan will cover.

Used in a Sentence: Actuarial value can help consumers navigate different health insurance plans as they weigh coverage options and their associated costs.

What It Means:  Actuarial value is meant to define how “generous” a health plan is in covering health care costs.  Understanding the actuarial value of a health plan helps consumers understand what they might have to pay (deductibles and coinsurance/copays) out-of-pocket in order to cover their overall health care costs.

History: Under the Affordable Care Act, actuarial value is utilized to help individuals and the small business market understand and compare health plan options offered inside and outside of new health insurance exchange marketplaces.  Health plan coverage options to be offered within the health exchanges, beginning in 2013, will be outlined through “metal” coverage tiers (bronze at 60%, silver at 70%, gold at 80%, and platinum at 90%).  For example, if a plan has a gold actuarial value at 80%, on average, an individual would have to pay 20% of the cost of their covered benefits.

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About this Author

Julie Scott Allen, Government Relations Director, Drinker Biddle, Law Firm
Government Relations Director

Julie Scott Allen is a government relations director with the firm’s Lobbying & Advocacy team and senior vice president with the District Policy Group.

For more than 15 years, Julie’s focus has been government relations, including advocating at the federal and state level and promoting legislative, regulatory and business agendas for nonprofit and for profit clients and national organizations. Prior to joining the firm, Julie served as vice president and managing director at Thompson Advisory Group, where she...

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