Effects of Alternative Insurer Responses to Discontinued Federal Cost-Sharing Reduction Payments

Broad Loading as an Alternative to Silver Loading

by Preethi Rao, Sarah A. Nowak

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Research Questions

  1. What are the potential effects of a policy change that would disallow the current practice of increasing only the premiums of silver-tiered individual market plans in response to halted federal payments of CSRs (silver loading)?
  2. What are the potential effects of requiring that the costs of CSR subsidies be spread among all metal-tiered individual market plans (broad loading)?
  3. What are the potential impacts of silver loading and broad loading on insurance enrollment, individual market premiums, and federal spending?
  4. What are the potential effects of restoring federal CSR payments?

Under the Affordable Care Act (ACA), insurers are required to offer cost-sharing reductions (CSRs) to eligible exchange enrollees who have incomes below 250 percent of the federal poverty level and are enrolled in silver-tiered exchange plans. CSRs reduce consumers' out-of-pocket health care costs (premiums, deductibles, and coinsurance), thereby increasing the actuarial value of plans. Under the original implementation of the ACA, the federal government made payments to insurers to cover the costs of CSRs. In late 2017, the Trump administration decided that federal payment of CSRs was unlawful and halted federal payments for CSR subsidies. A new congressional appropriation would be needed to reinstate federal CSR funding under this policy. Although the federal government is no longer making CSR payments to insurers, insurers are still required to provide CSR subsidies to qualifying enrollees. As a result, most states and insurers have adopted a practice known as silver loading to fund CSRs.

In this report, the authors address the effects of disallowing this practice, in which only the premiums of silver-tiered individual market plans are increased in response to halted federal payments of CSRs. They consider a scenario in which the costs of CSR subsidies must be spread among all metal-tiered individual market plans, a practice known as broad loading. They compare the silver loading, or status quo, scenario with the broad loading scenario to estimate the impacts on insurance enrollment, individual market premiums, and federal spending. In addition, they examine a scenario in which federal CSR payments are restored.

Key Findings

Insurance enrollment would fall under both broad loading and a restoration of federal CSR payments

  • The total number of insured nonelderly individuals drops in the broad loading scenario relative to the status quo (silver loading) scenario in both the national model (a decrease of 1.5 million) and the California model (a decrease of 160,000).
  • Under a scenario in which CSR payments are restored, the authors estimate that the total number of insured and the number of individual market enrollees would fall relative to the status quo, but that enrollment would be higher than under a broad loading scenario.

Under both broad loading and a restoration of federal payments for CSRs, premiums for silver plans would fall

  • Broad loading leads to higher premiums for bronze, gold, and platinum plans and decreases premiums for silver plans relative to silver loading.
  • With broad loading, nonsilver plans with relatively few enrollees must pay CSR costs formerly covered by silver plans with many more enrollees. That means the per capita cost increases for the former are relatively large, while the per capita savings of the latter are relatively small.
  • If CSR payments were restored, silver premiums would be lower than under either the status quo or broad loading. Premiums for nonsilver plans would be higher than under the status quo but lower than under broad loading.

Table of Contents

  • Chapter One


  • Chapter Two


  • Chapter Three


  • Chapter Four


  • Chapter Five


Research conducted by

The research described in this report was performed under a grant to Families USA from the California Endowment and conducted by the Payment, Cost, and Coverage Program within RAND Health Care.

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