The Centers for Medicare and Medicaid Services released a rate submission guidance memo for ACA individual market insurers last Friday.  CMS asked insurers to submit multiple rate requests for 2026 to deal with policy uncertainty.  There are three sets of policy scenarios which are mentioned as possibilities:

• ARPA/IRA subsidies expire on 12/31/25 as in current law
• ARPA/IRA subsidies to be extended
• Congress to appropriate funds for Cost Sharing Reduction Subsidies

The last bullet point would end the practice known as Silverloading.  In 2017, the first Trump administration determined that there was no legitimate appropriation for the federal government to pay insurers for the mandatory Cost Sharing Reduction (CSR) benefits provided to low income (100-250% Federal Poverty Level (FPL) enrollees who purchased silver plans. This was done with the expectation that the lack of payment for these benefits would drive insurers out of the market.  That failed.  Instead, insurers as a class quickly placed the cost of the CSR benefits into the premium of silver plans. This dramatically increased the price of silver plans relative to gold and bronze plans.

Who benefited from Silverloading?

Silverloading, for subsidized enrollees, it substantially made the cheapest plans much more affordable as Coleman Drake, Jean Abraham and I showed in a 2019 Health Affairs article:

Andrew Sprung and I showed that most of the enrollment effects were concentrated among enrollees with incomes over 200% FPL.

One of the key mechanisms of increased enrollment is that Silverloading substantially decreased the minimum cost of coverage for subsidized enrollees. Abraham and Drake in HSR estimated a substantial increase in who was exposed to a zero premium plan:

mean 2014‐2017 premium spreads allowed single enrollees at or below 149 percent of the FPL to purchase the lowest premium plan for zero dollars. After CSR cuts, mean premium spreads increased such that in 2018‐2019, enrollees at or below 208 percent of the FPL could purchase the lowest premium plan for zero dollars.

Drake and Anderson estimated a 14% increase in enrollment among enrollees with incomes between 151-200% FPL in 2018 in counties where these individuals were exposed to at least one zero-dollar plan.  We estimated zero-premium plan availability in 2018 led to at least 200,000 extra enrollees on Healthcare.gov.  Our further research strongly suggests that this enrollment bump is not from increased affordability but from an easier enrollment pathway with less administrative burden.

Researchers at RAND in 2019 compared Silverloading, an alternative CSR compensation policy known as Broadloading and direct funding of CSR costs by the federal government.  They found substantial declines in affordability for subsidized enrollees for non-Silverloading scenarios:

Relative to silver loading, we find that broad loading and restoration of federal CSR payments result in lower individual market premiums for silver plans but higher premiums for bronze, gold, and platinum plans. Furthermore, because APTC amounts are benchmarked to the second-lowest-cost silver plan, we find that under broad loading, APTCs decline in value, APTC-eligible individuals have to pay more out of pocket for their premiums on the individual market, and fewer choose to enroll. As a result, while federal spending on APTCs is lower under broad loading or CSR payment restoration, insurance coverage also declines overall, driven by reductions in coverage in the individual market.

The ACA individual market, as it was originally drafted had made insurance for almost anyone earning over 200% FPL too expensive and substantially undersubsidized if the goal was to attract a fairly healthy and on average low cost market.  The accidental policy of Silverloading  and the deliberate policy of enhanced ARPA/IRA subsidies corrected this flaw.