UPDATE: Who Will Do The #SilverSwitcharoo in 2019?

2019 OPEN ENROLLMENT ENDS (most states)

Time: D H M S

UPDATE 10/30/18: Thanks to some additional reviews/checking by Dave Anderson, Louise Norris, Andrew Sprung and myself, I've been able to update the spreadsheet further; the blog post has also been updated correspondingly.

Last year, while Congressional Republicans were doing everything possible to officially repeal the Affordable Care Act via legislative means, Donald Trump spent months repeatedly threatening to cause the ACA individual market exchanges to either "explode" or "implode" (depending on the day) by, among other things, cutting off Cost Sharing Reduction reimbursement payments to insurance carriers.

As I've explained many times before, Trump thought that his cutting off CSR payments would cause the insurance carriers to flee the markets altogether. He also thought his actions would simply cause low-income ACA enrollees to lose the financial assistance they were receiving to cover deductibles and other out-of-pocket expenses altogether, which is a reasonable assumption if you don't understand how CSRs actually works (which I guarantee you Trump doesn't).

A handful of carriers did drop out of the market specifically due to the CSR cut-off, including Health Alliance Plan here in Michigan, but for the most part they stuck around and simply raised their 2018 premiums accordingly to make up for the lost CSR revenue. The amount of the increases varied widely by carrier and state depending on how many low-income enrollees they had and other factors, but nationally, 2018 premiums increased around 14% or so on average to make up for the CSR losses.

As David Anderson, Louise Norris, Andrew Sprung and I explained a year ago, there were four different approaches carriers took for their 2018 pricing:

  • 1. Assume CSR is paid in a timely manner (this...didn't happen) ("No Load")
  • 2. Assume CSR is not paid and load all costs onto plans at all metal levels ("Broad Load")
  • 3. Assume CSR is not paid and load all costs only to all Silver Plans ("Silver Load")
  • 4. Assume CSR is not paid and load all costs only onto on-exchange Silver plans ("Silver Switcharoo")
    • Insurers are required to sell any plan offered on the exchange off-exchange as well, but they may sell additional plans off-exchange. These off-exchange-only Silver plans would not have CSR costs loaded.

Here's a step-by-step explanation of how #3 (Silver Loading) and #4 (Silver Switching) work.

For 2018, 21 states chose to go with Door #4 (full Silver Switcharoo), while 15 of them went with #3 ("normal" Silver Loading). Six states Broad Loaded, Two (plus DC) didn't load CSR costs at all, and the other six took an "every man for himself" approach, with each carrier choosing a different CSR cost loading strategy.

Due to the chaotic nature of the period leading up to November 1st last year, even among the states which Silver Switched, the effectiveness of the strategy was mixed. Some states like California, Florida and Pennsylvania were very much on top of it, with the strategy being coordinated by insurance regulators, carriers and (in the case of California), the ACA exchange itself. In those cases, unsubsidized enrollees were clearly instructed to shop around off-exchange for lower-priced versions of ACA-compliant individual market policies, and many saved thousands of dollars as a result.

In other states, however, the Silver Switching strategy was slapped together at literally the last minute, was never advertised or explained as an option, and many people likely lost out on potential savings as a result.

What about next year, though? Well, there was some confusion and anxiety earlier this spring when both HHS Secretary Alex Azar and CMS Administrator Seema Verma gave vague, confusing and conflicting statements about whether or not they would try to prevent states from Silver Loading at all. In March, it sounded like they might try to put the kibosh on Silver Loading. In April, Verma made this seem even more likely to happen. In response, in May, I co-wrote an article over at Health Affairs with Anderson, Norris and Sprung which laid out the likely fallout from a "Broad Load Only" requirement for 2019. In June, HHS Sec. Azar stated that he wasn't going to try and forbid Silver Loading after all (and to be honest, I'm not even sure he could do so, since premium rate regulation is pretty solidly at the state-level jurisdiction, as I understand it...a lawsuit would likely have ensued if he'd tried).

Finally, in early August, HHS/CMS did a complete 180 on the topic and instead of trying to ban Silver Loading, announced that they would instead encourage states to go the full Silver Switcharoo route.

For 2019, the carriers have had ample time to plan, with the certainty (at least since around March, when the Alexander-Murray stabilization bill fell apart) that CSR reimbursements will not be showing up for the foreseeable future. Combined with having the 2018 Silver Switch experience under their belts and with the Trump Administration officially giving its tacit blessing to doing so, a bunch of states which "only" Silver Loaded this year have upgraded to full Silver Switch status, as have a few states which were in Broad Load, No Load or Mixed Load status in 2018.

To the best of my knowledge, here's where things stand for 2019:

  • SILVER SWITCH: 29 states (*=upgrade from last year):
    • Alabama, Alaska*, California, Colorado*, Connecticut, Delaware*, Florida, Hawaii, Idaho, Kentucky*, Maine, Maryland, Michigan, Minnesota, Nevada, New Hampshire, New Mexico*, North Dakota*, Ohio, Pennsylvani, Rhode Island, South Carolina, Tennessee*, Utah, Vermont*, Virginia, Washington, Wisconsin, Wyoming
  • SILVER LOAD: 16 states
    • Arizona, Arkansas, Georgia, Iowa, Kansas, Louisiana, Massachusetts, Missouri, Montana, Nebraska, New Jersey, New York, North Carolina, Oklahoma, Oregon, South Dakota
  • BROAD LOAD: 3 states
    • Indiana, Mississippi, West Virginia
  • MIXED/UNKNOWN LOAD: 2 states
    • Illinois, Texas
  • NO LOAD: District of Columbia (special case: DC only has a handful of enrollees receiving CSR assistance)

It's important to keep in mind that "unknown" means just that--it's possible that some or all of these states are Silver Loading, Switching or Broad Loading across the board, but I don't have enough hard information to be sure.

Here's the states which have upgraded their status from 2018 to 2019:

  • Alaska: Upgraded from Silver Load to Silver Switch
  • Colorado: Upgraded from Broad Load to Silver Switch
  • Delaware: Upgraded from Broad Load to Silver Switch
  • Kentucky: Upgraded from Silver Load to Silver Switch
  • Montana: Upgraded from Mixed to Silver Load
  • New Mexico: Upgraded from Mixed Load to Silver Switch
  • North Dakota: Upgraded from No Load to Silver Switch
  • Tennessee: Upgraded from Silver Load to Silver Switch
  • Vermont: Upgraded from No Load to Silver Switch

Of these 9 states, Colorado, Delaware, North Dakota and Vermont will likely see the most dramatic changes in pricing for both subsidized and unsubsidized enrollees, with subsidized enrollees seeing huge bargains while unsubsidized enrollees may be in for a shock unless they shop around off-exchange instead.

For enrollees in all 9 states, unsubsidized enrollees will definitely have to shop around for off-exchange ACA-compliant policies to avoid the CSR hit, just like in the other 21 Silver Switcharoo states.

In every state, it'll be vitally important to shop around since there will be a lot of pricing and policy changes as always.

SHOP AROUND
SHOP AROUND
SHOP AROUND!