A proposed ACA rule in — wait for it — TEXAS

Texas recently passed a state law that changes how the state manages their ACA marketplace.  They released their implementation draft rule.

The big thrust of the law is that the state of Texas is taking on rate review responsibilities.  The ACA required that all premiums had to be reviewed before they could be sold on the health insurance marketplaces.  The primary goal of this review was to guarantee actuarial soundness — will enough money be collected to pay out plausible claims?  The first and preferred reviewer is each individual state.  However the federal government can perform this function if a state refuses to do so.  Several states, including Texas, have refused to do so.  This state law changes that.

More interestingly, Texas wants to do a very consumer-friendly implementation of rate review:

In addition, the new sections increase consumer purchasing power by requiring issuers to apply a uniform CSR adjustment factor. As explained in the author’s statement of intent, SB 1296 sought to remedy a misalignment in premiums across the different metal tiers of coverage that resulted from the discontinuance of federal payments for the CSRs that issuers must provide to eligible consumers. See Senate Research Center, Bill Analysis, SB 1296, 87th Legislature, 2021. To address the discontinuance of federal subsidies, silver-level plans should be priced to reflect the cost of providing coverage that has a higher actuarial value. However, issuers have not taken a uniform approach in adjusting premiums. By requiring issuers to use a uniform CSR adjustment factor, the rule (1) ensures that the federal tax credits will be based on appropriately priced silver-level plans, and (2) prevents consumers in other metal tiers from absorbing the expenses of the CSRs they do not benefit from. TDI expects that the uniformity will maximize the federal tax credits available to Texas consumers, increasing purchasing power and health coverage affordability. By increasing consumers’ purchasing power, issuers will also benefit from increased enrollment in the Texas individual health insurance marketplace….

Section 3.505(f)(6)(B)(iii) also requires issuers to use a CSR adjustment factor of 1.35
for silver plans on the exchange

That is geeky as hell.

The short version is that Texas will replicate the silverloading policy that Pennsylvania and New Mexico have leaned hard into. Silver plans will be priced above Gold plans and they will be priced near Platinum plans.

One of the modest surprises among those who thought that terminating CSR payments in the Fall of 2017 was either no big deal or a massive liberal policy win (all dozen of us) was that silver premiums effectively equalized at near gold rates in most states. Sometimes silver was a little bit above gold and sometimes silver was a little below gold. I had thought silver plans would be priced well above gold plans and near platinum plans as I wrote in August 2017:

Liberals will have achieved an incredible policy victory in the states that force insurers to load the cost of CSR onto only Silver plans. In these states, the benchmark plans will be sufficient to buy 90% actuarial value coverage. That is better than Medicare. That is an incredible improvement over the ACA as plans will become more affordable to many more people as premiums and deductibles will decrease and the risk pool will get healthier as the value proposition gets better.

Texas is actually going to do this effective January 1, 2023. Non-silver buyers will be significantly better off, silver buyers will be held (mostly) harmless and the feds will pay more in subsidies.

This is an interesting case of technocratic tinkering on a high partisan valence position that goes in the a priori opposite direction… interesting….