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Things are about to start getting weird.
As the CBO pointed out when they analyzed what would happen if Trump stopped the deductible-lowering subsidies, that course of action will naturally tend to bring down the relative premium of gold plans. Partly because insurers will need to jack up premiums on silver plans. And partly because, since the premium subsidies are a fixed dollar amount tagged to the price of silver plans but applicable to any metal tier plan you want, the rising premium subsidy values will tend to make gold plans cheaper for anyone eligible for a subsidy.
That should happen naturally over time, but states can step in to accelerate it and increase the amount of federal premium subsidies flowing into their marketplaces. All they have to do is find a way to make silver (and only silver) plans more expensive, and the subsidy amounts will automatically increase. And every non-silver plan gets cheaper for anyone eligible for a subsidy.
California's doing it:
And Oregon's doing it:
More states will likely move to fight back, playing off the feds to boost their residents' premium subsidies. If Congress doesn't check Trump and step in to restore the ACA to the way it's designed to work, it's going to be a wild ride.
As the CBO pointed out when they analyzed what would happen if Trump stopped the deductible-lowering subsidies, that course of action will naturally tend to bring down the relative premium of gold plans. Partly because insurers will need to jack up premiums on silver plans. And partly because, since the premium subsidies are a fixed dollar amount tagged to the price of silver plans but applicable to any metal tier plan you want, the rising premium subsidy values will tend to make gold plans cheaper for anyone eligible for a subsidy.
Gold plans would attract a larger share of enrollees under the policy—mostly people with income between 200 percent and 400 percent of the FPL who would have purchased a silver plan under the baseline. In addition to the larger premium tax credits under the policy, lower gross premiums would eventually contribute to higher enrollment. Under the policy, gross premiums for gold plans would eventually be lower than those for silver plans because, the agencies expect, silver plans would almost exclusively insure people with income between 100 percent and 200 percent of the FPL and (with CSRs) provide actuarial values of 87 percent or 94 percent—significantly higher than the actuarial value of around 80 percent for gold plans.
That should happen naturally over time, but states can step in to accelerate it and increase the amount of federal premium subsidies flowing into their marketplaces. All they have to do is find a way to make silver (and only silver) plans more expensive, and the subsidy amounts will automatically increase. And every non-silver plan gets cheaper for anyone eligible for a subsidy.
California's doing it:
California’s health insurance exchange said Wednesday it has ordered insurers to add a surcharge to certain policies next year because the Trump administration has yet to commit to paying a key set of consumer subsidies under the Affordable Care Act.
The decision to impose a 12.4% surcharge on silver-level health plans in 2018 means the total premium increase for those policies will average nearly 25%, according to Covered California.
Taxpayers, not consumers, will bear the brunt of the extra rate hike because federal premium assistance for policyholders, which is pegged to the cost of coverage, will also increase.
And Oregon's doing it:
In order to ensure carriers can continue to offer coverage in Oregon, DCBS is ordering health insurance companies offering plans on HealthCare.gov to increase their already approved silver metal tier 2018 plan rates by 7.1 percent.
Non-silver metal tier plan rates (e.g., bronze and gold) will remain unaffected.
This increase will affect plans both on and off HealthCare.gov, and will compensate for the $49 million worth of cost-sharing reduction payments that the federal government will no longer be making to Oregon insurance companies in 2018.
“These rate increases are necessary to ensure the stability of the health insurance market,” said Acting Director Straight. “Oregonians who receive financial assistance through the Marketplace will find that premium assistance will also increase, shielding them from most of the increase.”
More states will likely move to fight back, playing off the feds to boost their residents' premium subsidies. If Congress doesn't check Trump and step in to restore the ACA to the way it's designed to work, it's going to be a wild ride.