Actuarial Value
The percentage of total covered healthcare costs that a health plan pays on average across a standard population.
What is Actuarial Value?
Actuarial value (AV) is the estimated average percentage of covered medical expenses that a health insurance plan pays for a standard population of enrollees, accounting for deductibles, copayments, coinsurance, and out-of-pocket maximums. It does not predict what any individual will pay; rather, it measures how a plan shares costs across a pool of enrollees on average. Under the Affordable Care Act (ACA), health plans in the individual and small-group markets are classified into metal tiers based on their actuarial value: Bronze (~60%), Silver (~70%), Gold (~80%), and Platinum (~90%). A Bronze plan pays 60% of covered costs on average, leaving enrollees responsible for 40%. Higher AV plans have higher premiums but lower out-of-pocket exposure when care is needed. Actuarial value is calculated using a standardized benefits simulation model developed by HHS.
Example
A Silver plan with a 70% actuarial value means that, across a standard population, the insurer pays 70% of covered medical expenses and enrollees collectively pay 30% through deductibles, copays, and coinsurance. An individual who uses little healthcare will pay less than 30%; one with high utilization may reach their out-of-pocket maximum and pay less as well.