Washington (& Colorado) exchanges warn enrollees about Reverse Silver Loading

Washington State

Back in late October, a few days before the launch of the 2020 Open Enrollment Period, I issued a warning to ACA exchange enrollees who may have been benefiting from the "Silver Loading" premium pricing strategy for in 2018 and/or 2019 that the enhanced subsidies they've been taking advantage of for two years are likely going to be reversed for 2020:

What happens next year if the benchmark Silver plan drops by 4%...but the Bronze, Gold, and the OTHER Silver plans stay flat?

  • The benchmark Silver now only costs $576/month, or $6,912/year.
  • Assuming the same $32K income and no other changes, the enrollee now qualifies for $288 less in subsidies, since the difference between $6,912 and 8.54% of their income is $288 less than last year.
  • That means the benchmark Silver would cost them exactly the same ($228/month)...but if they were enrolled in a Bronze or Gold plan it would now cost them $24/month more than last year.

This is essentially Silver Loading in reverse, and it's why cherry-picking the benchmark Silver plans only can be very misleading when it comes to figuring out how much a particular enrollee will spend compared to last year.

In other words, the Trump Administration is bragging about official benchmark premiums dropping 4% on average while ignoring the implications of that on net premiums for subsidized enrollees (particularly those earning 200-400% FPL who don't qualify for substantial CSR assistance).

Halfway through Open Enrollment itself, as I expected, it looks like "reverse silver loading" is indeed starting to pop up as a real issue, based on these press releases from both Connect for Health Colorado and the Washington HealthPlanFinder:


More Coloradans buying their own health insurance are seeing lower premiums, largely due to the reinsurance program that passed this year. Reinsurance helps insurers with their most costly claims. However, given the complexities of how financial help available through the Marketplace is calculated, current customers should shop around to reduce monthly costs.

The Colorado wording is pretty cryptic...it's just vague "things change every year, so make sure to shop around" guidance, not much stronger than the advice the exchanges give every year.

Washington State's press release, on the other hand, is a lot more specific:

Many Washington residents seeking health insurance coverage on Washington Healthplanfinder will see more options and changing prices when shopping this year.

This is happening because of new market entrants who are offering lower cost plans at all metal tiers. The result is that some residents will see changes to their tax credit as well as the opportunity to find new, lower cost plan options when buying coverage on the state’s marketplace.

“Given the arrival of new plans to the health insurance landscape, we are encouraging existing customers to review their current options and make sure their plan meets their needs and budget,” explained Chief Marketing Officer Michael Marchland. “The lower priced silver plans mean changes to the tax credit available to qualified customers and this may be reflected in their 2020 premiums.”

Tax credits are calculated based on the premium of the second lowest cost silver plan available to consumers that plan year. This year, new lower priced plans are available in several counties, which means consumers may see a smaller tax credit for 2020 then they had last year. However, this may be offset by the availability of new plans with lower premiums.

The Exchange highly encourages customers to update their information, take advantage of our resources, and shop plans as other affordable options may be available starting November 1. To find the Navigator or  broker  nearest you: use the WAPlanfinder app or go to Washington Healthplanfinder.

They don't go into all the intricacies of Silver Loading, but they do give the basics of how the subsidy formula works and state point-blank that lower-priced plans can sometimes ironically mean higher-priced net premiums.