The affordable care act defines different allowed levels of health insurance based on the percentage of health costs the plans will cover. The different levels are given names of different metals: bronze, silver, gold, platinum. This provides the element of choice that the population demands. In the case where a person will use extensive health care services, the metal levels are virtually identical in terms of the total amount of money the person pays each year. The total cost of insurance plus health care is the same for each metal level when the health services exceed the deductible. Whether the cost is premium, deductible, or co-insurance, the cost must come from the person’s budget. At an individual level, this total cost is somewhere around $12,000 (in DC area) per year, assuming that one is not qualified for a government subsidy.
There is more variation of services offer within each metal level than there is between metal levels. The variation occurs in terms of scope of network of providers, the formulary for prescription drugs, and other benefits such as health savings accounts. There are two decisions to make in terms of health insurance: the first is the metal level, and the second is the actual plan that has suitable networks and formularies.
Assuming that a person will make a moderate use of health care services to reach even bronze-level deductibles, the choice of metal levels is whether one wants to make a steady monthly premium payment in gold or higher plans with zero deductible, or whether he wants to pay in lump sums as services are rendered until the deductible is reached such as in bronze level plans. For someone with steady employment and with an appetite for medical services, I’d imagine that they would choose a gold or platinum level plan. For someone whose income is more seasonal or unpredictable, I’d imagine they would choose a bronze or silver plan. At the end of the year, the budget spent is about identical. The difference is when the money is spent within the year.
The real choice for metal levels comes when people estimate or intend to use very little health services during the year. In these cases the choice for the lowest metal level, bronze, makes sense. If they guess, right, their total budget will be only for the lower premium and not for any services that would count toward a deductible. If they guess wrong, they will be no worse off than the case of someone who expects to use a lot of health services but chooses to pay in lump sums as the services are rendered.
In this system there may be two populations choosing low-level bronze plans and only one population the high-level gold or platinum level plans.
Nearly everyone choosing the higher level plans intend to use a lot of health services during the year and these people most likely have stable careers with steady income. These are the frequent-users of health care. I suppose it is possible some generous people with little intention to use health care may participate in high-cost plans out of sense of charity but I suspect they would be very rare. Spending money on a gold or platinum level plan with no intention to utilize abundant health care services is not recognized as a tax-deductible charitable contribution. There are more effective ways to use money for charitable goals than to over-pay premiums for unneeded services. I expect that holders of gold or platinum plans have a reasonable expectation of extensive utilization of health care services.
I understand that the majority of participants in ACA are choosing silver level plans contrary to the original intention was for the majority to choose the gold level plans. The silver level was to provide a bottom level for the most cost-conscious so that the gold level would appear to be a good deal for most people. Bronze level plans were introduced later in an attempt to make insurance more affordable to people with even tighter budgets (and there have been suggestions for even lower copper level plans). There was an unintentional consequence of offering something lower than silver and with a name of a cheaper alloy instead of an noble element. The bronze level offered a new basement that elevated the silver level plan to be perceived as the best deal for most people. It would have been better to retain silver as the bottom level (with characteristics of the bronze level) and inserted a palladium level in between silver and gold. Psychologically, many people will decide they deserve better than the lowest option and think that gold is the logical step up from silver, ignoring the palladium option.
As it is, the silver is has the diverse mix of subscribers that were intended for the gold level. The silver subscribers will include both the reluctant and the eager users of health services. The reluctant are hoping for a savings by avoiding care but with the protection of not being overwhelmed by costs if they do need care. The eager users are taking advantage of the ability to schedule the deductible expenses at more convenient times of the year instead of being obligated to make a higher monthly premium.
That leaves the bronze level, the level named after an alloy instead of a noble metal, and situated in the basement of the insurance levels. This bronze level attracts the bargain hunters, the people interested in the tax sheltered flexible spending accounts, and the financial game players in terms of scheduling the payment of high deductibles.
A possible consequence of the mandatory coverage of one the different metal levels with that this may become a new way to define economic classes. Instead of talking about the lower-middle class (euphemism for poor but not impoverished), middle class, and upper class, we will talk about people belonging to bronze, silver, or gold/platinum classes. In terms of classes of people, I combine gold and platinum as one because I see no difference in the community that would choose those plans: they can easily budget the high monthly premiums and they feel entitled to abundant health services.
The whimsical metallic naming different insurance levels for marketing purposes may result in a change in the political dialog within the government as a whole. In particular, it provide a new way of discriminating between social classes by using the metal-names of their health care insurance plans.
Social class discrimination within USA has always been a little weak because of the need for self-identification of the class. Although economists attempt to draw income or wealth boundaries between different classes, the people within those boundaries often disagree with those definitions. Many if not most people in economist-defined poor class identify themselves as middle class (perhaps grudgingly accepting the modifier “lower”). Many people in economist-defined wealthy class identify themselves as middle class (perhaps grudgingly accepting the modifier “upper”). One reason why USA has been so resilient to class conflict is because nearly everyone sees themselves as belonging in the middle.
The introduction of ACA with its mandate for choosing a health insurance plan presents a more inescapable identification of class. Now matter what they think of themselves economically, a person can not escape the metal-name of the health insurance plan he must choose to purchase. Although this choice is not (yet) publicly available, this choice is part of the record available to government. I suspect it will be inevitable that this choice will become publicly available information. Eventually, we will be able to get a list of names of bronze, silver, and gold/platinum people. Instead of the ambiguous interpretation of class based on income or wealth, we now have a firm identification of a metal level that the different classes will naturally gravitate toward.
Although not yet publicly available, this has an immediate consequence because the health providers will immediately know the metal level of each patient. The first item of information required for a medical visit is the presentation of the insurance card that identifies the metal level. I have no evidence that this has caused discrimination, but the potential for discrimination must be present. A provider has the opportunity to prejudge a patient based on his presentation of a metal level of insurance coverage. Over time, providers will observe or invent characterizations to distinguish bronze patients from gold/platinum patients. A similar tendency will occur within health insurers although this may be obscured by automated data analytics that will conclude this discrimination from the data. Even if the offered care is unaffected by this knowledge, the attitude and demeanor of the provider may begin to be quite different toward the different metal levels.
As I mentioned, this metal level choice will not remain secret for long. I doubt this is private information even now. The HIPAA protections of privacy apply to medical conditions more than insurance choices and the ACA came after HIPAA. A quick search revealed this opinion article that claims that HIPAA privacy applies only to providers and not details of health insurance policies. I am inclined to agree with that opinion although I have no expertise in HIPAA. What I do know is that there is an aggressive industry of online services providing any type of unprotected data readily available from a search funded by advertisement or a modest fee. It seems inevitable that a service will emerge that will allow everyone to discover the metal level of coverage for any person as quickly as health providers can find this information.
With modern video-processing capabilities of internet-connected personal electronic devices (such as smart phones), it is possible that someone can take a picture of someone, and discover the identity of that person. With sufficient motivation, the picture-taker can find out public information about this person, such as his presence in social-media services or his criminal record. It is possible one can find the metal-level of health-insurance coverage at the same time.
For routine social or business encounters, the metal level of insurance coverage appears irrelevant. However, this metal level is an inescapable declaration of economic status or attitude. There are qualitative differences in economic class of people occupying each of the metal levels. These differences will become apparent over time. We will observe or invent characterizations of people who participate in the different metal plans. These characterizations will most likely match the implications of the metal names. Gold/platinum people will be the most prestigious, and bronze people will be the least. With the use of portable smart phone technologies, we can “see” a person’s class as the metal associated with the name associated with the picture we capture.
The chosen metal levels in ACA plans are not private and the different metals naturally attract their own distinctive populations based on their economic situation. The ACA metal levels provides the opportunity to distinguish people into class labels that they will not be able to escape from. We will see bronze, silver, and gold/platinum people. Although this identification is possible to change during future open-enrollment periods, there are strong economic reasons for selecting the specific metal level they currently hold. While a bronze-plan holder can upgrade to a more noble metal, doing so will come with a much higher monthly premium that will be harder to cover indefinitely. Over time, the metal levels may become the class identifications for class conflicts the alluded USA politics until now.
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