Silver Loading Decreased Premiums and Increased Enrollment in the Health Insurance Marketplaces

• In Event: Federalism in Practice: State Policy Discretion and Coverage and Market Outcomes in the ACA

Abstract

Background: The Affordable Care Act empowers states regulate pricing in the state’s individual health insurance markets.  In 2017, the federal government stopped direct reimbursement of Cost-Sharing Reduction (CSR) subsidies to insurance companies. Insurance companies were required to continue to provide these mandatory benefits to low income silver plan enrollees.  Starting in 2018, forty three states allowed for insurers to increase silver plan premiums to incorporate these CSR costs in a strategy known as Silver Loading.
Objective: Causally evaluate the impact of Silver Loading on premiums and enrollment in the ACA markets relative to broad loading strategies in the ACA Individual health insurance markets.
Data: Our two primary data sources were HealthCare.gov’s Qualified Health Plan Landscape File and the CMS Open Enrollment Period Public Use File. The Qualified Health Plan Landscape File identifies each health plan offered in all counties in all states using the HealthCare.gov platform, alongside premiums, metal levels, and offering insurers. The Open Enrollment Period Public Use Files report Marketplace enrollment at the county-year level, separately stratified by income group, age group, metal level. We obtained data on states’ silver loading policies from a list compiled by Marketplace policy experts. Additionally, we used data on PTC expenditures from the Internal Revenue Service Statistics of Income data. Lastly, we used state-year level data on Medicaid expansion and 1332 reinsurance waivers from the Kaiser Family Foundation.
Methods: Using county-level data from 2015 to 2021 and an entropy-balanced difference-in-differences approach, we estimated the causal effects of silver loading on premiums and enrollment. We found that silver loading reduced the lowest-cost bronze and gold net premiums by 11.7 percent and 14.6 percent, respectively. Consequently, enrollment among enrollees with incomes between 250 and 400 percent of the federal poverty level increased by roughly 30 percent. Applying these estimates to 2026 data, we project that eliminating silver loading would cause over one million middle-income enrollees to lose coverage in 2027.
Results: We found that silver loading reduced the lowest-cost bronze and gold net premiums by 11.7 percent and 14.6 percent, respectively. Consequently, enrollment among enrollees with incomes between 250 and 400 percent of the federal poverty level increased by roughly 30 percent. 
Policy Implications: Applying these estimates to 2026 data, we project that eliminating silver loading would cause over one million middle-income enrollees to lose coverage in 2027. Federal policymakers must carefully weigh the projected budgetary savings of funding CSRs against these substantial anticipated coverage losses.

Author

• David Anderson, University of South Carolina
  Presenting Author