Why Silver Health Insurance Plans Are the Most Popular
By far the most popular type of plan on the Affordable Care Act exchanges is “silver,” but this was entirely by design. From HHS:
Marketplace Plan Selection by Metal Level
- 20 percent of the persons who have selected a Marketplace plan have selected a Bronze plan
- 65 percent of the persons who have selected a Marketplace plan have selected a Silver plan
- 9 percent of the persons who have selected a Marketplace plan have selected a Gold plan
- 5 percent of the persons who have selected a Marketplace plan have selected a Platinum plan
- 2 percent of the persons who have selected a Marketplace plan have selected a Catastrophic plan
A silver plan is one where insurance covers on average 70 percent of medical expenses.
The fact that silver was the most popular metal tier doesn’t tell us anything about people’s insurance preferences because the law was designed to encourage people to choose that level. To begin with, the silver tier is the benchmark used to determine premium subsidies and where exchanges often first directed consumers.
Most importantly, the law was designed to effectively assure no one making under 250% of the federal poverty level would choose anything but silver. Individuals making under that amount can qualify for cost sharing subsidies to reduce the cost deductibles and co-pays, but only if they choose a silver plan. Choosing anything besides silver would be throwing money away. This also gave insurers a big incentive to focus primarily on offering more silver plans.
There is strong reason to believe that if the subsidy structure didn’t heavily favor silver plans, they wouldn’t have been nearly as popular. According to the report, 76 percent of people on federal exchanges with financial assistance selected a silver plan but only 25 percent of people without financial assistance choose silver.
This added financial help to low income individuals could have been structured so it didn’t overwhelmingly favor any one particular plan level, but Democrats chose to make sure most people would be in silver plans and they succeeded.