Expanded Bronze Plans: What They Are and How They Work

Can Provide Richer Benefits for Enrollees

Expanded bronze plans provide more coverage

Heath Korvola/DigitalVision/Getty Images

An expanded bronze plan is an option for your health insurance needs. Expanded bronze plans pay for some medical services before you meet the deductible, and can have higher actuarial values than other bronze plans.

Actuarial Values for Expanded Bronze Plans

Under the Affordable Care Act, all individual and small group health plans with effective dates of 2014 or later are required to fall into one of four "metal" levels: Bronze, silver, gold, or platinum (in the individual market, there are also catastrophic plans available to some enrollees).

Metal levels are determined by actuarial value, which refers to the percentage of overall health care costs that a health plan pays (versus the portion that enrollees pay, via their copays, deductibles, and coinsurance). Bronze plans have actuarial values of roughly 60%, and it goes up in increments of 10 percentage points from there: 70% for silver plans, 80% for gold plans, and 90% for platinum plans.

Because it's challenging to design a plan so that it hits an exact actuarial value amount, insurers are given a de minimus range of -4 to +2 for each level. So a gold plan, for example, can have an actuarial value that falls anywhere from 76% to 82%.

Starting in 2018, the Department of Health and Human Services allowed for an even wider range for bronze plans by adding parameters for "expanded" bronze plans that pay for certain services before the deductible is met. Expanded bronze plans can have actuarial value as high as 65%, which means the de minimus range for bronze plans now extends all the way from 56% to 65%. But bronze plans that don't meet the guidelines for being an "expanded" bronze plan must still fall within an actuarial value range of 56% to 62%.

A plan with an actuarial value of 65% is essentially halfway between an average bronze plan and an average silver plan. And the rules outlined by HHS ensure that an expanded bronze plan will provide benefits that go beyond those offered by a typical bronze plan (note that these plans are sometimes referred to as "extended" bronze plans).

Expanded Bronze Plans: How Are They Different?

Expanded bronze plans must pay for at least one "major service" before the deductible is met, although they can impose "reasonable cost-sharing." So these plans generally have copays or coinsurance for whatever major service they cover pre-deductible. Major services include primary care visits (with a minimum of at least three covered visits per year), specialist visits, inpatient hospital services, generic drugs, specialty drugs, preferred branded drugs, or emergency room services. This is in addition to preventive care, which is covered on all non-grandfathered plans without any cost-sharing at all.

There is an exception for HSA-qualified high deductible health plans (HDHPs). These policies are strictly regulated by the IRS and are not allowed to cover non-preventive services before the member meets the minimum deductible that applies to HDHPs (with some exceptions that have been explicitly allowed by the IRS). So HDHPs cannot cover any of the major services pre-deductible, but the expanded bronze regulations still allow HDHPs to have actuarial value anywhere in the range of 56% to 65%.

The rules for expanded bronze plans are laid out in Federal regulation 45 CFR 156.140(c), which notes that bronze plans can only have actuarial values above 62% (and up to 65%) if they pay for at least one major service (other than preventive care) before the deductible, or are an HSA-qualified high-deductible health plan.

When HHS finalized the rules for expanded bronze plans, they noted that catastrophic plans are already required to cover three primary care visits each year, before the deductible is met, and that "bronze plans were not intended to be less generous than catastrophic plans." So the idea was to open the door for insurers to offer more robust plans at the bronze level, if they choose to do so.

Insurers are not required to offer expanded bronze plans. They can choose to only offer bronze plans at the lower end of the actuarial value spectrum, some of which only pay for preventive care pre-deductible and have deductibles at or near the maximum allowable out-of-pocket amount. If the plan does not meet the guidelines for expanded bronze coverage, it must have an actuarial value that falls in the 56% to 62% range. In order to go above that, a bronze plan has to pay at least some of the cost of at least one of the major services before the deductible is met (unless the plan is an HDHP).

Should You Buy an Expanded Bronze Plan?

Expanded bronze plans are available in the health insurance exchanges in nearly every state, although availability does vary by area within each state. Some expanded bronze plans have the word "expanded" in the plan name, but others do not. More often than not, people who enroll in an expanded bronze plan are doing so simply because the plan's overall cost and coverage meet their needs, without necessarily knowing that the policy is technically an expanded bronze plan. But expanded bronze plans will generally make it fairly obvious that certain services—most commonly, office visits—are covered with a copay before you meet the deductible.

Coverage of office visits with a copay, before the deductible is met, is very common for employer-sponsored health plans and for many of the more robust plans in the individual (self-purchased) market. But at the bronze coverage level, it's quite common to see health plans that count all non-preventive services towards the deductible, and only pay for them after the deductible is met.

Although bronze plans (including expanded bronze plans) tend to have fairly high deductibles, expanded bronze plans will look more similar to the coverage you may be accustomed to receiving from an employer, with a copay when you see a doctor even if you haven't yet met the deductible.

As with most things related to health insurance, there's no right or wrong answer in terms of whether you should buy an expanded bronze plan. But there are a few things to keep in mind when you're shopping for coverage:

Monthly Premiums, Total Out-of-Pocket, and Expected Utilization

Anytime you're picking a health insurance plan, there are several factors that you'll want to take into consideration. They include the monthly premiums (ie, the amount you're going to have to pay every month just to keep the coverage in force, regardless of whether you need medical care), the out-of-pocket costs if and when you do need care, the medical providers who will be available to you through the plan's network, and the plan's prescription drug formulary (covered drug list).

All other factors being equal, an expanded bronze plan with an actuarial value that extends as high as 65% would be more expensive than a regular bronze plan, since it will have richer overall benefits. But provider networks have a significant impact on health insurance premiums: A plan with a broader network or a plan that covers some of the cost of out-of-network care is generally going to be more expensive than a plan with a narrow network that doesn't cover any out-of-network services. So you might find an expanded bronze plan that offers copays for doctor's visits but still has a lower monthly premium than a regular bronze plan that counts all services towards the deductible but gives you access to a larger number of doctors and medical facilities.

When you're shopping for plans in the exchange, it's common to see them ordered from lowest to highest monthly premium, or from lowest to highest total anticipated costs based on premiums as well as the health care utilization that you anticipate for the year (obviously this part isn't an exact science, as it can be tough to determine exactly how much medical care you're going to need in the future). If an expanded bronze plan is offered by a narrow network insurer in your area, you might find that it has lower monthly premiums than some of the regular bronze plans offered by competing insurers with broader networks.

This is all just a reminder that you need to consider other factors besides the monthly price: How likely are you to use the expanded benefits? Are your preferred doctors and medical facilities in-network with the plans you're considering? If you take any medications, are they covered under the plans you're considering, and if so, how much will your out-of-pocket costs be?

No Subsidy? Don't Forget Catastrophic Plans

If you're eligible for a premium subsidy, it can be used to purchase an expanded bronze plan, just as it can be used to purchase a plan at any metal level. But if you're not eligible for a premium subsidy, you might want to consider a catastrophic plan as an alternative. These policies are fully compliant with the ACA, and are automatically available to applicants under the age of 30. And they're also available to people 30 and older who obtain a hardship exemption, which is available if other coverage in your area isn't considered affordable.

Although the deductibles on these plans are equal to the annual maximum out-of-pocket allowed under federal rules ($8,150 in 2020 and $8,550 in 2021), a catastrophic plan will allow you three primary care visits per year (with copays) before you meet the deductible. And catastrophic plans are likely to be quite a bit less expensive than expanded bronze plans that pay for primary care visits pre-deductible.

Premium subsidies cannot be used with catastrophic plans, so people who qualify for premium subsidies will typically be better off buying a "metal" plan (bronze, silver, gold, or platinum). A single person can be eligible for premium subsidies in 2020 with an income of almost $49,960; a family of four can be subsidy-eligible with an income of up to $103,000 (note that the prior year's poverty level numbers are always used to determine subsidy eligibility in the exchange).

Modest Income? Consider a Silver Plan

If you're eligible for cost-sharing reductions (CSR), you'll definitely want to consider a silver plan. Regular silver plans can have actuarial values that range from 66% to 72%, which means that a basic silver plan will be almost indistinguishable from an expanded bronze plan that has an actuarial value of 65%. But for people who qualify for CSR, silver plan benefits are automatically made more robust, bumping actuarial values up to 73%, 87%, or even 94%. You still pay the regular silver plan premiums that you would have paid anyway (premium subsidies keep these plans relatively affordable, although they do cost more than bronze plans), but you essentially get a free upgrade on your coverage.

From that perspective, it's clear that a silver plan might be a better choice than an expanded bronze plan if you're eligible for CSR. An expanded bronze plan is almost certain to have lower monthly premiums, but its actuarial value won't exceed 65%. A silver plan with built-in CSR, however, will have significantly more robust benefits.

People with income between 100% and 250% of the poverty level are eligible for CSR benefits, which are automatically incorporated into all of the available silver plans when an applicant has an income in the eligible range (the lower income threshold is 139% of the poverty level in states that have expanded Medicaid, as Medicaid is available below that level). For a single person enrolling in 2020 coverage, 250% of the poverty level is equal to $31,225. For a family of four, it's $64,375.

Cost-sharing reductions are strongest, however, for people with income up to 200% of the poverty level (for a single person, that's nearly $24,980 in 2020; for a family of four, it's $51,500). If your income doesn't exceed 200% of the poverty level, it's likely that the extra monthly premiums you'll have to pay to buy a silver plan (as opposed to a cheaper bronze plan) will be worth it, given the substantially better benefits you'll get. If your income is in the range of 201%-250% of the poverty level, the modest CSR benefits might not be worth the additional premiums. But again, this is a personal decision.

The take-away point is that you'll want to carefully consider all of the plans available to you before picking one, and you definitely don't want to just pick the plan with the lowest monthly premium, as you may be leaving significant benefits on the table by doing so.

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Article Sources
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