I hear new health plans must meet 'actuarial value' standards - what's that mean?

All individual and small employer health plans sold inside and outside the new Health Benefit Exchange - Wahealthplanfinder.org - must have an actuarial value of at least 60 percent.

This means the plan must pay for least 60 percent of your medical costs for essential health benefits. Sixty percent is the standard for the new 'bronze level' plans. You also can choose from a silver level or gold metal level plan. Silver plans pay for 70 percent of your costs and gold pay for 80 percent.

Here's answers to additional questions about how the new 'actuarial value' works:

If my plan has an actuarial value of 70 percent  does that mean I will not have to pay more than 30 percent of my entire insurance costs?

No, the actuarial value is only based on the level of coverage the plan provides for essential health benefits.  If your plan has an actuarial value of 60 percent, for example, that means that the plan will pay 60 percent of your covered expenses for essential health benefits and you pay 40 percent of the covered expenses for essential health benefits. 

Although the actuarial value of your covered expenses for essential health benefits will be covered, you may have other costs such as deductibles, copays and coinsurance, as well as costs for services that are excluded or are not covered benefits.

Make sure you read your policy to see what services are excluded services.  Benefits that are not covered would be subject to the terms of your insurance policy, so it is important to read your policy before getting the service or treatment. 

What are essential health benefits? As of Jan. 1, 2014, all individual and small employer health plans must cover these 10 benefits:

1. ambulatory patient services
2. emergency services
3. hospitalization
4. maternity and newborn car
5. mental health and substance use disorder services including behavioral health treatment
6. prescription drugs
7. rehabilitative and habilitative services and devices
8. laboratory services
9. preventive and wellness services, chronic disease management
10. pediatric services - including oral and vision care