The short answer
Actuarial value is the percentage of total average health care costs that a plan covers for a standard population. For example, a plan with an 80 percent actuarial value pays about 80 percent of covered costs on average, leaving members to pay about 20 percent through deductibles, copays, and coinsurance. ACA Marketplace plans use actuarial value to define their metal tiers — bronze, silver, gold, and platinum — with higher tiers having higher actuarial values and thus covering more of your costs for a higher premium. It is an average, not what any one person will pay.
So actuarial value is the average share of costs a plan covers, and it defines the ACA metal tiers.
How the metal tiers use it
The ACA metal tiers correspond to actuarial value ranges: bronze plans have the lowest, covering the smallest average share for the lowest premium, while platinum plans have the highest, covering the most for the highest premium, with silver and gold in between. So a higher-tier plan generally means lower out-of-pocket costs when you use care, in exchange for a higher monthly premium. Our guide to bronze vs. silver ACA plans covers choosing a tier, and our glossary defines the terms.
Higher metal tiers have higher actuarial values, covering more of your costs for a higher premium.
Why it matters
Actuarial value helps you compare how much financial protection a plan offers on average, which pairs with the premium to show the real tradeoff. A low-premium bronze plan leaves you paying more when you use care, while a higher-tier plan costs more monthly but less at the point of care. Your expected health use should guide the choice. Because it is an average, your personal costs depend on your care. Our glossary covers related terms. This is educational information.
The takeaway: actuarial value is the average share of costs a plan covers, defining the metal tiers, so use it with the premium to weigh monthly cost against protection when you use care.
Frequently Asked Questions
What is actuarial value on a health plan?
The percentage of total average health care costs a plan covers for a standard population. An 80 percent actuarial value means the plan pays about 80 percent of covered costs on average, with members paying the rest.
How do ACA metal tiers relate to actuarial value?
The tiers correspond to actuarial value ranges — bronze covers the least average share for the lowest premium, platinum the most for the highest, with silver and gold in between.
Does actuarial value tell me what I will pay?
No. It is an average for a standard population, so your personal costs depend on how much care you use. Use it with the premium to weigh monthly cost against protection at the point of care.
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