Silver Switcharoo

I talked about this the other day, but re-reading my post, I don't think I emphasized it nearly enough:

It's also important to keep in mind that due to how the ACA's subsidy formula is structured (combined with Silver Loading and Silver Switching), a lower benchmark premium will actually result in higher net premiums for many subsidized enrollees (although it's still good news for those who are unsubsidized). Here's why:

  • Let's say the unsubsidized premiums for a given enrollee in 2019 is $400 for Bronze, $600 for the benchmark Silver and $700 for Gold.
  • Let's say that enrollee earns exactly $32K/year (256% FPL), meaning they only have to pay 8.54% of their income for the benchmark plan.
  • That means they qualify for ($7,200 - $2,733) = $4,467 in subsidies ($372/month).

This would leave them paying $228/month for the benchmark Silver...but they can apply that towards a Bronze plan if they wish so they'd only pay $28/month, or a Gold plan so they only pay $328/month.

Just a few minutes ago I noted that the state of Oregon is once again strongly considering taking a second crack at establishing their own, fully state-based ACA exchange after spending the past five years piggybacking on top of HealthCare.Gov.

Well, the Oregon State Public Interest Research Group just published an extensive report in which they urge the state to do just that...along with several other key changes which I also strongly agree with:

Steps like a mandate for Oregon residents to buy health insurance and relief for exchange customers who earn too much to receive tax credits under the Affordable Care Act could help reverse premium hikes that have shot up amid attempts by the Trump administration to roll back the law, OSPIRG, the Oregon State Public Interest Group, argued in a report released Wednesday.

Via Email from the Connect for Health Colorado exchange...

Customers Receiving Financial Help Through Connect for Health Colorado® Seeing a 14% Drop in Net Monthly Premium Cost

DENVER – Coloradans who get financial help buying health insurance through Connect for Health Colorado® are paying an average 14 percent less in “net premium” – what they pay after assistance – compared to the average net premium in 2018, according to data released today.

Three of every four current Connect for Health Colorado customers qualify for financial help to reduce the monthly cost of health insurance. The average net premium for those Coloradans is $117 per month, down from $136 per month last year.

“We are happy that we are able to make health insurance affordable for so many people,” said Kevin Patterson, Chief Executive Office of Connect for Health Colorado. “The number of our customers receiving help rose this year by seven percentage points, to 76 percent, an important increase. We know we have more work to do, and are committed to expanding our impact as we work with policy makers, our stakeholders and our customers throughout the state.

At long last, the final piece of the puzzle can be added: I just received the final 2019 Open Enrollment Period numbers from Vermont Health Connect.

Before looking at it, it's important to understand that Vermont has a unique way of reporting ACA-compliant healthcare policy enrollments.

For the first two years of Open Enrollment, the state didn't allow any off-exchange (or "direct") enrollments for the individual market (or the small business market, I believe). That means all indy market enrollments were done through the exchange. Due to technical problems (and possibly for other reasons as well), however, starting in 2016 they started allowing direct/off-exchange enrollment as well, as every other state does (the District of Columbia is the only other ACA exchange which has no off-exchange market). However, Vermont still requires the insurance carriers to report those off-exchange enrollees to them and they report them as well.

I wish every state reported their enrollment data this way; it would make it much easier for me to do my job, since as it stands the off-exchange market is a bit of a mystery in most states.

Last year there was much hand-wringing by myself and other healthcare wonks about whether or not the Trump Administration would attempt to kill off Silver Loading (and its even-wonkier cousin, Silver Switching). HHS Secretary Alex Azar and CMS Administrator Seema Verma kept sending out mixed and confusing signals about their intentions.

Eventually, Azar decided that while he doesn't like the practice, there wasn't enough time to change the rules before the 2019 Open Enrollment Period was set to begin, so he decided to take a pass for the time being.

Well, in yesterday's NBPP release, the HHS Dept. addressed the issue of CSR reimbursement funding directly...but they also made it clear that they're letting Silver Loading slide for another year:

Unfortunately, Vermont is one of the three states (along with Idaho and Maryland) which hasn't released any 2019 Open Enrollment data yet, so I don't have any numbers to report on that front. However, they did just post this "Open Letter" which I found interesting. The two things to keep in mind about Vermont are: 1) they include their own subsidies on top of ACA subsidies; and 2) they were among two states (North Dakota is the other one) which upgraded their premium pricing in 2019 from "no load" to full #SilverSwitcharoo status.

You can read about the wonky mechanics of this here, but the bottom line is that Vermont residents who qualify for subsidies have substantially better deals available this year, while unsubsidized enrollees have an important workaround to avoid being stung with extra CSR costs:

An Open Letter to Everyone Who Has Helped Vermonters Get into the Right Health Coverage

I've written a lot about how the clever Silver Loading and Silver Switcharoo pricing workarounds have managed to result in millions of people becoming eligible for dirt-cheap or even free Bronze ACA exchange healthcare policies, or bargain-priced Gold plans for millions more. Last year, in fact, the Kaiser Family Foundation determined that roughly 4.5 million uninsured Americans qualified for FREE Bronze plans nationally.

Well, they've done it again for 2019. The total number eligible for FREE Bronze plans has dropped a bit to 4.2 million, but that's still a TON of people:

It isn't often that I write about anything Oklahoma-related, and it's rarer still that I post good news out of the...um..."labor omnia vincit" state (that's their slogan, I looked it up...), so today's a rare day indeed.

A couple of weeks ago I noted that at least 9 more states will be jumping onboard the #SilverSwitcharoo train for 2019, bringing the total to 30:

Last year I wrote a LOT about Silver Loading and Silver Switching for 2018...basically, the way which ACA individual market enrollees can save hundreds or even thousands of dollars on their 2018 insurance policies by taking advantage--perfectly legally and ethically--of the unusual pricing of different metal level policies this year.

The short version is this: Due to the way the ACA's tax credit formula works, Donald Trump's attempt at sabotaging the ACA exchanges by cutting off Cost Sharing Reduction (CSR) reimbursement payments to insurance carriers actually (partly) backfired on him, resulting in an unusual situation in which several million subsidized enrollees ended up benefitting from the pricing fallout, while millions of unsubsidized enrollees ended up being hurt by it...but other unsubsidized enrollees ended up being able to avoid being hurt by switching to a special off-exchange Silver plan (thus, the "Silver Switch").

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.

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