At least 40 states (& counting) expected to either #SilverLoad or #SilverSwitcharoo in 2019!

Last fall I wrote a lot about how different states would be dealing with the tens of millions of dollars in losses they were facing after the Trump Administration decided to cut off Cost Sharing Reduction (CSR) reimbursement payments to them. As a quick reminder, there basically four (or five, depending on your POV) options available to each carrier and/or state insurance commissioner for dealign with CSR costs for 2018:

  • 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".

As my colleagues David Anderson, Louise Norris and Andrew Sprung and I explained last fall, there are winners and losers involved in each of these strategies. Here's a little table illustrating who's helped/hurt by each option:

Of the four, "No Load" doesn help or harm any enrollees, but means the carriers have to eat the loss. Last year, DC, North Dakota and Vermont were the only ones to go this route, but now that it's become clear that CSR payments will not be forthcoming anytime for the foreseeable future, ND and VT have changed their tune and are upgrading to the full Silver Switcharoo (DC is a special case; only 3% of their enrollees receive CSR assistance anyway, and it's the weakest type at that, so there's barely any money being lost regardless...I suspect they decided it literally wasn't worth the bother in their case).

"Broad Load" is by far the worst option; every unsubsidized enrollee has to pay more, along with Gold subsidized enrollees. Silver subsidized enrollees see no change one way or the other, so the only ones who benefit at all are subsidized Bronze enrollees (and not by much even then).

"Silver Loading" is the second-best option; it means most people are either better off or, at worst, sees no change either way...but unsubsidized Silver enrollees get screwed.

The best option (but also the most confusing) is "Silver Switcharoo". The good news is that if properly implemented and taken advantage of, many enrollees are much better off, some see no change either way and none of them are worse off.

Last year, as far as Anderson, Norris, Sprung and I could figure, out of all 51 states (DC counts as a state for ACA market purposes), 3 went with No Load; 6 went with Broad Load; 16 Silver Loaded, 20 Silver Switched and 6 were Mixed.

However, as I noted above, for 2019 the situation has changed. Some of the carriers/state regulators were caught with their pants down last fall and didn't have time to properly assess the situation, but this time they all should understand the benefits of Silver Loading and especially the Silver Switcharoo. As a result, I'm happy to note that at least 8 states have "Upgraded" their CSR loading strategy for 2019: Alaska, Arkansas, Colorado, Kentucky, New Mexico, North Dakota, Tennessee and Vermont. Better yet, all seven are Silver Switching.

And there could be additional upgrades--only about half the states have actually published their 2019 individual market rate filings so far, though a few others have at least pre-announced their CSR strategy. Assuming none of the states downgrade their strategy (I can't fathom why anyone would do so), by my count at least 28 states will be Silver Switching this fall, and another 12 will at least be Silver Loading.

Among the 6 which Broad Loaded this year, Colorado has already seen the light; hopefully a few of the others will do so as well. The only state which has confirmed that they're sticking to their guns with a Broad Load is Indiana, for reasons unknown.

The table below shows the 2018 strategy for each state, followed by what I know about their 2019 strategy so far. The green cells at the right are confirmed upgrades; the pale yellow ones are states which are already Silver Switching that I assume will keep that status. The rest in italics are placeholders for now.

Again, DC is a special case, so sticking with the 50 actual states, since Indiana is foolishly refusing to take advantage of either Silver Load option, the best-case scenario still possible is 49 Silver Switch and 1 Broad Load. The more realistic best case scenario looks more like perhaps ~35 Silver Switch and ~14 Silver Loading, but we'll have to wait and see how the rest of the states play out.