The Art of Sabotage: CMS Seeks to End “Silver-Loading”

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CMS has proposed to end the practice of “silver loading,” which could result in higher premiums and out-of-pocket costs for consumers. The “silver loading” strategy originated from the Trump Administration’s decision in 2017 to halt cost-sharing subsidy payments to insurers that are used to offset the cost of coverage. Halting these payments would have caused a dramatic increase in plan premiums for consumers in future years. However, insurers reacted to the loss of funding by only increasing the premiums for the silver-tier plans, which kept rates mostly stable. Since the ACA’s premium tax credits are calculated based on the second-lowest cost silver-tier plan available, this results in consumers receiving higher-than-normal premium tax credits to help them afford to enroll in a plan. Preventing insurance plans from “silver loading” will greatly limit the ability for consumers to select a plan that is right for them, as most plans will be too expensive. CMS has not settled on a specific method for abolishing this practice and they are currently seeking input from stakeholders.

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