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Payers, Trade Groups Defend Silver-Loading in Comments to CMS

Payers and industry trade groups strongly pressured CMS to retain the practice of silver-loading and keep auto reenrollment for ACA marketplace consumers.

Silver-loading and auto reenrollment

Source: Thinkstock

By Jennifer Bresnick

- Major health payers and representative trade groups are urging CMS not to eliminate the practice of silver-loading, which has been used to stabilize premiums in a volatile and unpredictable market.

In response to a request for comments included in the proposed Payment Notice for the 2020 plan year, payers balked at the suggestion that silver-loading, or raising the price of benchmark plans to help consumers secure higher premium tax credits, should be prohibited.

CMS floated the idea in its recent proposal, but provided few details and noted that it is not planning to make major changes in the next plan year.

Silver-loading has become the most popular way to compensate for lost cost-sharing reduction (CSR) payments, which have been withheld by the Trump Administration since 2017.

While legal battles to recoup the funds are ongoing, payers have been forced to turn to other strategies to meet their obligations under the Affordable Care Act and control premiums for beneficiaries.

READ MORE: Insurers Notch Legal Wins in Cost Sharing Reduction Fights

“We strongly recommend HHS continue to defer to defer to states on the approval of rates and continue to permit states to allow silver loading without placing new restrictions on rating practices,” AHIP said in its response.

AHIP pointed out that despite the lack of CSR reimbursement from the government, payers are still obligated to pass CSR benefits to eligible consumers. 

“Most states took the approach of silver loading whereby issuers incorporated the CSR impact onto silver metal level premiums only,” AHIP explained.

“The Department should continue to defer to states in approving rating practices to ensure affordable coverage for its consumers. Restricting states’ ability to allow silver loading would increase the number of uninsured and result in consumer-facing premium increases for both those eligible for premium tax credits and those ineligible.”

The Blue Cross Blue Shield Association (BCBSA) took a similar stance.

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“It is imperative that CMS continue to defer to states on how issuers should address the loss of CSR funding and avoid making any changes to the program unless such changes are in response to enactment by Congress of a legislative package that would help 2 offset premium impacts for consumers,” the organization said.

“Prohibiting or limiting silver loading would present a number of risks that could negatively impact both subsidized and unsubsidized consumers. If silver loading is prohibited and a broad load is required, these consumers would likely face significant premium increases.”

Cigna and Anthem also joined their peers in defending the strategy.

“Anthem opposes ending silver loading, and recommends that HHS continue to defer to states on the method of loading CSR costs. Removing silver loading would increase the number of uninsured and result in significant consumer-facing premium increases for both those eligible for Advanced Premium Tax Credits (APTCs) and those ineligible,” the payer said.

“State regulators are in the best position to identify which rating practices will best protect consumers in their states.”

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Cigna’s response was the same.

“Cigna opposes any proposed prohibition on silver loading and recommends HHS continue to defer to states on rating practices and the approval of rates,” the company stated.

“State regulators are in the best position to identify which rating practices will best protect consumers in their states, and most states have encouraged silver loading. Prohibiting silver loading would reduce affordability for customers and negatively impact the stability of the individual market, which runs counter to HHS' stated goal of maintaining a stable regulatory environment.”

Payers also came to the defense of auto-reenrollment in health plans, stressing that automatic renewals reduced consumer confusion and prevented individuals from losing their plans without being aware.

“We strongly urge HHS to continue the current auto reenrollment process for the 2021 plan year and beyond,” Anthem said. “Auto reenrollment is critical to promoting continuous coverage for enrollees and limiting gaps in coverage that impede consumers’ access to care. Ending or modifying auto reenrollment would have serious, negative consequences for consumers, issuers, brokers, and exchanges.”

The payer added that concerns about eligibility errors could be better addressed by improving the eligibility process, “including more robust and frequent Periodic Data Matching (PDM) and implementation of upfront screening to avoid duplicative exchange enrollment of individuals eligible for Medicare or coverage through other government programs.”

BCBSA agreed that stopping auto-reenrollment would be problematic for members.

“Ending this process would lead to higher premiums and disrupt three million exchange consumers that rely on the re-enrollment process today,” the organization said.

AHIP added that eliminating auto reenrollment could also result in higher premiums for individuals who remain insured, and also urged the agency to improve eligibility checks rather than prevent reenrollment.

“Consumers rely on auto reenrollment to maintain coverage from year-to-year and avoid gaps in coverage that could limit their access to medical care,” the group said.

“HHS has invested significant resources and worked tirelessly in partnership with health insurance providers to make this a smooth experience for consumers, to minimize gaps in coverage, and mitigate administrative burdens for exchanges and health insurance providers. We strongly urge HHS to continue to leverage these efforts and maintain auto reenrollment.”

More than 26,000 individuals and stakeholder groups responded to the proposed rule.  To access all public comments, please click here.

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