Update: The court has instead opted to dismiss the case; but states can bring action again if circumstances change i.e. Admin blocks silver-loading in 2020 and beyond. IHP story TK @nicholas_bagley@charles_gaba taking comments ! https://t.co/cPHJlmehsH
This year, thanks to their reinsurance program, ACA individual market premiums dropped by around 23.6% on average, from a whopping $1,040/month to "only" $795/month per enrollee.
No Load: They could gamble that the CSR problem would be resolved and the payments would be made after all (i.e., they would price normally).
Broad Load: They could spread the CSR cost out evenly across all of their 2018 ACA policies, on exchange & off.
Silver Load: They could load the CSR costs onto all Silver plans only (both on & off exchange).
Silver Switcharoo: They could load CSR costs onto all on-exchange Silver plans only, while also creating "mirror" Silver plans off-exchange without any CSR load.
Mixed Load: Each insurance carrier could choose whichever of the other 4 strategies they wanted to and let the chips fall where they may. Not sure if this really counts as a "strategy", since it's more or less "all of the above".
For nearly a year, healthcare wonks like myself, David Anderson, Andrew Sprung and Louise Norris have been heavily getting the word out to promote not just the "Silver Loading" CSR-load workaround, but an even more clever variant which I've coined "the Silver Switcharoo" which takes the concept of Silver Loading and goes one step further.
20 states went the full #SilverSwitcharoo route (the best option, since it maximizes tax credits for those eligible for them while minimizing the number of unsubsidized enrollees who get hit with the extra CSR load);
16 states went with partial #SilverLoading (the second best option: Subsidized enrollees get bonus assistance, though not as much as in Switch states; more unsubsidized enrollees take the hit, but they aren't hit quite as hard);
6 states went with "Broad Loading", the worst option because everyone gets hit with at least part of the CSR load except for subsidized Silver enrollees;
6 states took a "Mixed" strategy...which is to say, no particular strategy whatsover. The state insurance dept. left it up to each carrier to decide how to handle the CSR issue, and ended up with a hodge podge of the other three
3 states (well, 2 states + DC, anyway) didn't allow CSR costs to be loaded at all. Their carriers have to eat the loss, which makes little sense, but what're ya gonna do?
Implications Of CMS Mandating A Broad Load Of CSR Costs
In October 2017, the Trump administration eliminated federal funding to reimburse insurers for cost-sharing reduction (CSR) subsidies, which they are obligated to provide to qualifying enrollees in the Affordable Care Act (ACA) Marketplace. President Donald Trump had threatened to eliminate CSR funding throughout 2017, so insurers and insurance regulators in many states had anticipated the move by adding the cost of CSRs to premiums for 2018.
The Affordable Care Act (ACA), in section 1402, requires insurers who participate in the marketplaces established under that act to offer CSRs to eligible people who purchase silver plans through the marketplaces. CBO views that requirement as establishing an entitlement for thoseeligible.
To qualify for CSRs, people must purchase a plan through a marketplace and generally have income between 100 percent and 250 percent of the federal poverty guidelines (also known as the federal poverty level, or FPL). The size of the subsidy varies with income.
CSRs reduce deductibles and other out-of-pocket expenses like copayments. For example, in 2017, by CBOs estimates, the average deductible for a single policyholder (for medical and drug expenses combined) with a silver plan varied according to income in the followingway:
(sigh) OK, gather 'round children, and let me tell you the story of how Cost Sharing Reductions went from being a thorn in the side of the Obama Administration to becoming a massive tree branch jammed into the kidney of Congressional Republicans. The following is an updated version of a lengthy post of mine from about six months ago.
The Cost Sharing Reduction (CSR) payment controversy has only really been sucking up a huge amount of political and policy oxygen for the past year and a half, since Donald Trump took office, but actually started long before then. Why? Because the whole reason the CSR payments were discontinued in the first place is a federal lawsuit filed by John Boehner on behalf of the House Republican Caucus back in 2014.
The "stupidest thing possible" being referred to was whether or not CMS Administrator Seema Verma is planning on putting the kibosh on Silver Loading and the Silver Switcharoo starting in 2019:
The head of the Centers for Medicare and Medicaid Services would not say Thursday if the Trump administration is considering setting limits on how insurers that sell Obamacare plans structure subsidies for their customers.
"I'm not going to comment on the agency's deliberations," CMS Administrator Seema Verma said when asked by the Washington Examiner about rumors that had circulated about the issue. When pressed about whether any conversations had occurred, Verma said, "I'm just going to leave it at that."
