State RegulationsNY specificDifficulty 2/5
Two exchange plans have the same monthly premium, yet one leaves the enrollee paying far less at the time of care. Under the Affordable Care Act, which concept explains the difference?
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Answer & full 3-part explanation (select an option above, or peek)
Why A is correct
Under the Affordable Care Act, actuarial value measures the share of the total average cost of covered benefits a plan is expected to pay for a standard population, with the enrollee covering the rest through deductibles, copayments, and coinsurance. Two plans with identical premiums can therefore impose very different point-of-care costs, because the plan with the higher actuarial value picks up a larger share of the bill. Actuarial value is also the concept behind the bronze, silver, gold, and platinum metal levels.
Why the other options are wrong
- B) An insurer's investment portfolio value concerns its finances, not how coverage costs are shared with enrollees.
- C) The exchange does not grade insurers' credit, and no such rating governs cost sharing.
- D) Health policies have no secondary resale market; the difference lies in each plan's actuarial value.
Memory hook
Actuarial value: the plan's average share of the bill.