Yesterday, I wrote a long blog post at Health Affairs on the incredible amount of discretionary decisions insurers and state regulators have in setting the size of the Silver bump that resulted from the termination of Cost Sharing Reduction (CSR) subsidies.
States have two big decisions that change the size of the silver load and therefore the distribution of costs and benefits:
- Expanding Medicaid to 138% Federal Poverty Level or higher (this includes analytically Basic Health Plans that go to 200% FPL)
- Medicaid expansion decreases the size of the silver load which makes premiums more expensive for the 200-400% FPL group but cheaper for the 401% and more FPL groups
- Mandating Broad Load vs. Silver loads
- Broad Loads are more expensive for everyone with no cheap deals
Insurers have significant choices to make as well. These choices are far deeper into the weeds than the broad policy objectives that states can set out. The biggest lever is playing with spreads. A silver plan is nominally a 70% actuarial value plan but it is allowed to be anywhere from a 66% to 72% actuarial value and still be a silver plan. The CSR variants are allowed to be a point above or below the target. This gives a lot of space for an insurer to play games with.
These decisions will vary by competitive nature of counties and strategies of insurers. Insurers that are in (near) monopolistic counties will likely seek to maximize their spread to lower prices for as much of the subsidized population as possible. Insurers in competitive counties face, I think, different incentives on their spread games.
The ACA has, and always will be, a story of differences over the county and state line. Silverloading is just a new source of variation.