Right now, insurance companies offer lots of plans to consumers purchasing on their own, but it’s hard to know if your money is well spent. Do the cheaper plans have huge gaps in coverage? Hard to tell. To try and make it easier to compare plans, most of the legislation working its way through the House and Senate tries to level the “actuarial value,” an insurance term that measures the total value of all the benefits taken together. The bills are designed to reduce variability in the overall value of health plans so you don’t get tripped up when you shop.
This brief explains the concept of actuarial value and provides sample plan designs so that consumers can see what an “actuarial value of .60” might look like. The bottom Iine: standardizing health plans by actuarial value—in conjunction with other reforms—would provide important new protections for consumers. However, there would still be enough variability in plan choices that the final legislation will also need strong tools that simplify plan comparison. And none of this will assure affordability. The minimum standards for consumer cost-sharing under these plans may leave you with out-of-pocket costs that fall beyond your budget.