The actuarial value of a health plan is the percentage of total medical costs the plan covers, on average, across all its members. A plan with an actuarial value of 70% pays about 70 cents of every dollar spent on covered benefits, leaving you responsible for the remaining 30%. This single number captures the combined effect of your deductible, copays, coinsurance, and out-of-pocket maximum into one measure of how generous a plan is.
How Actuarial Value Is Calculated
Actuarial value isn’t based on your personal health expenses. It’s calculated using a “standard population,” a model group of enrollees meant to represent the typical mix of people buying individual and small group insurance. The federal government maintains an actuarial value calculator that insurers plug their plan designs into. The calculator runs those cost-sharing features against the standard population’s expected medical spending and produces a percentage.
The inputs that matter most are the plan’s deductible, general coinsurance rate, and out-of-pocket maximum. These three features have the biggest effect on the final number. Copays for specific services like office visits, urgent care, and prescriptions also factor in, but they shift the percentage less dramatically. Preventive care is always excluded from cost-sharing under the ACA, so it doesn’t enter the calculation at all.
One important detail: the calculation only considers in-network spending (with the exception of emergency room visits). If you go out of network and pay higher prices, those costs aren’t reflected in the actuarial value. Premiums aren’t included either. Actuarial value strictly measures how costs are split once you actually use covered services.
The Four Metal Tiers
Under the Affordable Care Act, marketplace plans are sorted into four tiers based on their actuarial value:
- Bronze: 60% actuarial value. The plan covers 60% of costs on average; you pay 40%.
- Silver: 70% actuarial value. The plan covers 70%; you pay 30%.
- Gold: 80% actuarial value. The plan covers 80%; you pay 20%.
- Platinum: 90% actuarial value. The plan covers 90%; you pay 10%.
These tiers tell you nothing about which doctors are in network or what services are covered. Every marketplace plan must cover the same set of essential health benefits regardless of metal level. The only difference is how the costs are divided between you and the insurer.
Why “Average” Matters
The word “average” is doing a lot of work in this definition. A Silver plan covers 70% of costs across its entire pool of members, not necessarily 70% of your personal bills. If you’re relatively healthy and only visit a doctor once or twice a year, you might pay well under 30% of your total costs, since many preventive services are fully covered. If you have a major surgery or chronic condition that pushes you past your out-of-pocket maximum, the plan could end up covering far more than 70% of your individual expenses, because the insurer picks up 100% of covered costs once you hit that ceiling.
Think of actuarial value as a rough guide to a plan’s generosity, not a personal cost prediction.
The Tradeoff With Premiums
Higher actuarial value typically means higher monthly premiums. A Platinum plan charges more each month because it’s absorbing 90% of the cost when members use care. A Bronze plan charges less per month but shifts more costs to you at the point of service through larger deductibles and higher coinsurance.
This creates a practical decision point. If you expect to use a lot of medical care, a Gold or Platinum plan may cost less overall despite the higher premium, because your out-of-pocket costs stay low. If you’re generally healthy and mainly want coverage for unexpected emergencies, a Bronze plan’s lower premium can save you money most months, though you’ll pay more if something serious happens.
Allowed Variation in Each Tier
Plans don’t have to hit their target actuarial value exactly. Federal rules allow a buffer called the “de minimis range.” For most individual and small group plans, this range is +2 to -4 percentage points. That means a Silver plan could have an actual actuarial value anywhere from 66% to 72% and still qualify as Silver. Expanded Bronze plans, which are designed to cover certain services before the deductible, get a wider range of +5 to -4 percentage points.
This flexibility explains why two Bronze plans from different insurers can feel quite different in practice. One might have a lower deductible with higher copays, while another does the reverse. Both land within the acceptable actuarial value range, but the day-to-day cost experience varies.
Cost-Sharing Reductions for Silver Plans
Silver plans play a unique role in the marketplace because they’re the only tier eligible for cost-sharing reductions. If your household income falls between 100% and 250% of the federal poverty level, enrolling in a Silver plan automatically increases its actuarial value, sometimes dramatically.
At the lowest income bracket (100% to 150% of the poverty level), a Silver plan’s actuarial value jumps from 70% to 94%, making it more generous than a standard Platinum plan. At 150% to 200% of the poverty level, it rises to 87%. At 200% to 250%, it increases modestly to 73%. These reductions lower your deductible, copays, coinsurance, and out-of-pocket maximum without changing your premium. This is why financial advisors often recommend Silver plans for lower-income enrollees even when a Bronze plan’s premium looks more attractive on the surface.
Actuarial Value for Employer Plans
Employer-sponsored plans aren’t sorted into metal tiers, but actuarial value still matters. Under the ACA’s employer mandate, a company’s health plan must meet a “minimum value” standard of at least 60% actuarial value. That’s the same threshold as a Bronze marketplace plan. If the employer plan falls below 60%, employees may qualify for premium tax credits to buy marketplace coverage instead, and the employer could face a penalty.
Most employer plans comfortably exceed this floor. Large employers commonly offer plans in the 75% to 85% actuarial value range, roughly equivalent to Gold-tier marketplace coverage, though the exact design varies widely.
What Actuarial Value Doesn’t Tell You
Actuarial value is useful for comparing how generous plans are in broad strokes, but it leaves out several things that affect your real costs. It doesn’t reflect your monthly premium, so a plan with higher actuarial value could still cost you more overall if the premium difference is large enough. It doesn’t account for out-of-network costs, which can be substantial if your preferred providers aren’t in the plan’s network. And it doesn’t capture the quality of the network itself, including how many specialists are available or whether your local hospital participates.
It also can’t predict your individual spending. Two people on the same 70% plan will have very different out-of-pocket experiences depending on their health needs. The percentage is a population-level average, useful for comparison shopping but not for budgeting your personal medical expenses. For that, look at the plan’s specific deductible, copay schedule, and out-of-pocket maximum, which for marketplace plans is capped at $9,200 for individual coverage in 2025.