Silver-Loading Means 28% Uninsured Can Get $0 Premium Bronze Plan

December 11, 2019 - Twenty-eight percent of the uninsured population could have enough premium tax credits to obtain zero-premium bronze-level health plans in 2020 due to silver-loading, a Kaiser Family Foundation (KFF) report found.

“While the percent of the population without health coverage has decreased since the major coverage expansion in the ACA, at least 10% of the non-elderly population is still uninsured. This analysis looks at how many of the remaining uninsured are eligible for premium subsidies large enough to cover the entire cost of a bronze plan, which is the minimum level of coverage available on the Marketplaces,” the report stated.

KFF attributes the prevalence of premium-free Affordable Care Act bronze plans largely to the elimination of cost-sharing reduction payments. The premium tax credits—applicable for any exchange product—are regionally determined, based on silver plan benchmarks. Now those seeking federally subsidized insurance through premium tax credits can cover their bronze-level health plan premiums 100 percent, but they will have to pay a high deductible, KFF warned.

Beneficiaries who choose to apply their premium tax credits toward fully covering a bronze plan will receive free preventive care and a few free primary care services from their physician, all before having to pay a deductible. Hospital out-of-pocket healthcare spending will be extreme, but it would be even higher without any insurance, KFF notes.

For 2020, many payers have raised silver premiums high enough that some bronze-level plans have no premium at all.

The 4.7 million people who can now purchase a premium-free bronze plan represent a minimal uptick from last year, when 4.2 million people or 27 percent of the uninsured population were able to purchase a premium-free bronze plan.

There are so many populous regions in Texas, Florida, North Carolina, and Georgia in which the silver plan benchmark is low that these states contribute half of the population eligible for a free bronze-level plan.

Over a million Texas residents are eligible for the free plan and over half a million in Florida. Nearly 60 percent of Iowa’s uninsured population, 45 percent of Alaska’s, 44 percent of Wyoming’s, and 41 percent of both Idaho and South Dakota’s uninsured populations are eligible for a no-premium bronze plan.

KFF also pointed out that beneficiaries can consider a silver plan, which has its highest deductible ($3,268) set at around half of the bronze plan’s deductible ($6,506) for a premium of anywhere from $20 to $215 per month, dependent upon income for a single person. Silver plans offer much more cost-sharing assistance with the deductible, though their premium is higher.

Before cost-sharing reduction (CSR) payments were eliminated, health plans, which had to give lower prices for products on the exchanges, received a reimbursement from HHS which covered the price of the product. Health plans did not gain financially from this transaction, but rather the HHS payment went straight to covering the product.

In October 2017, however, the administration announced that it would be ending cost-sharing reduction payments. The administration furthermore did not cover the payers’ expenses from that year. Lawsuits against the federal government still abound as payers insist that they deserve compensation for the 2017 CSR payments they made which were not reimbursed.

At first, the announcement instigated a seismic reaction in the exchanges, with payers fleeing the marketplaces leaving behind bare counties with only one payer option for ACA exchange members.

Payers found a way around the lack of CSR payments by silver-loading—raising the silver-level plan premiums which set the benchmark for premium tax credits in order to inflate the tax credits high enough to reduce eligible beneficiaries’ premiums significantly.

Now, the exchanges are stabilizing with payers filtering back into the marketplace and experts anticipate 13 percent fewer bare counties in 2020. But clearly the impacts of the 2017 executive decision against CSRs are still rippling into today’s marketplace.

Early this year, CMS indicated that it may be eliminating the practice of silver-loading and received strong pushback from the payer community.