ACA insurers turn to 'silver-loading'
As a result of the disproportionate increase in silver-plan premiums, far more consumers are opting for bronze-level plans, a move that could cost them big in the long run.
The Trump administration’s decision last year to stop making cost-sharing reduction (CSR) payments to insurers has led to a peculiar situation.
In the absence of those subsidies, which were meant to help insurers to reduce copays and other out-of-pocket costs for low-income customers, insurers have substantially increased premiums for silver-level plans, which serve as the benchmark for determining premium tax credits.
However, insurers have not increased premiums for bronze or gold-level plans nearly as much. The tactic is called “silver-loading.”
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As a result of the increased premiums in silver plans, far more customers are joining bronze or gold-level plans. A new study by the Robert Wood Johnson Foundation finds that the percentage of enrollees choosing bronze has increased from 23 to 29 percent during the most recent enrollment period. Among those who are signing up for ACA plans for the first time, the percentage is even higher: 34 percent.
Unfortunately, notes the study, many customers who are choosing low-premiums bronze plans better hope they don’t rack up big medical bills. Sixty-two percent of bronze plans do not pay for any portion of medical services until a member hits their deductible, which for bronze plans averages $6,400. In contrast, only 23 percent of silver plans do not provide any cost-sharing before the deductible.
The study raises serious concerns about the implications of the increase in bronze plans among low-income customers, noting that the average primary care visit costs $100, equivalent to a day’s wages for somebody making $13 an hour.
An attempt in Congress earlier this year to reinstate CSR payments failed and the prospects of a new effort succeeding in the near future appear slim.
“Barring any surprise announcements from CMS, silver loading is likely to continue next year and will probably expand to more states,” the study authors write. “While silver loading has increased affordability for many subsidized consumers, and the low bronze premiums are attractive, the benefit design may prove challenging.”