Currently, patients entering the health insurance exchanges can choose from platinum, gold, silver and bronze plans. What is the difference between them? As the names indicate, platinum has the highest premium and bronze the lowest. However, bronze plans may be more expensive. Why is this? In essence, all the plans cover the same items. The only difference between platinum and bronze is that the actuarial value differ. In plain speak, what this means is that patient cost sharing (i.e., copayments and deductibles) in platinum plans are much lower than in bronze plans. Thus, if you have a serious illness, bronze plans may cost more than platinum plans due to high deductibles. Rather then platinum, and bronze plans, better names would be low risk/high cost and high risk/low cost.
Is there a better way? Amitabh Chandra and Austin Frankt think so. Here is their proposal in the New York Times:
Health plans could define themselves at least in part by the value of technologies they cover, an idea proposed by Professor Russell Korobkin of the U.C.L.A. School of Law. For example, a bronze plan could cover hospitalizations and visits to doctors for emergencies and accidents; genetic diseases; and prescription drugs that keep people out of hospitals. A silver plan could cover what bronze plans do but also include treatments a large majority of physicians find useful. A gold plan could be more inclusive still, adding coverage, for instance, for every cancer therapy shown to improve patient outcomes (no matter the cost) as long as it was delivered at a leading cancer center. Finally, a platinum plan could cover experimental and unproven cancer therapies, including, for example, that proton beam.
This certainly seems like a sensible proposal to me.