Cost-sharing reduction payments help offset the cost of providing health insurance to low-income Americans on the exchanges. In response to the Trump administration’s move to stop paying the CSRs last fall, health insurers increased premiums for their most popular silver plans for the 2018 benefit year.
The Congressional Budget Office found this decision, dubbed “silver loading,” added about 10 percent to the cost of the plans. While lower-income Americans were eligible for subsidies on exchange-based health plans and largely avoided the added cost, Americans with higher incomes faced higher premiums, according to Kaiser Health News.
Federal regulation generally requires health insurers to charge the same rates for identical qualified health plans whether they are sold on or off the exchanges. CMS’ new guidance asks states to allow health insurers to tweak the plans outside the exchange so they do not incur any surcharges intended for on-exchange plans.
“Allowing issuers to offer and market plans that are available exclusively off-exchange that do not include the CSR load would provide unsubsidized enrollees the opportunity to purchase a plan at a lower premium,” according to the guidance. However, many states already implemented these changes last fall, so some analysts question how effective the new guidance will be, according to Kaiser Health News.
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