What is meant by "actuarial value"?

Actuarial value refers to the percentage of total healthcare costs that a health insurance plan is expected to cover for a typical population of enrollees. This concept is critical in determining how much of the medical expenses will be paid by the insurance provider versus the amount the insured individual will need to pay through deductibles, copayments, and coinsurance.

For example, if a plan has an actuarial value of 70%, it implies that the insurance will cover approximately 70% of healthcare costs for silver plan enrollees, while the beneficiaries are responsible for the remaining 30%. This metric is essential for comparing different health insurance plans and understanding the level of financial protection they offer.

The other options refer to different aspects of insurance but do not accurately define actuarial value. The final amount after all claims have been paid involves the settlement process rather than the relationship between costs and coverage. The total revenue an insurance plan aims to achieve relates to its business goals rather than coverage specifics. Lastly, the total premiums collected reflects income but does not provide insight into the cost-sharing dynamics between insurer and insured.