CMS released a technical guidance document on Friday that was very interesting to me, half a dozen other ACA pricing nerds and a bunch of insurers. It has some very interesting news and hints about the future:
This is the federal government encouraging states to help their insurers hold harmless as many people as possible from the termination of regular CSR payments. And they even propose a twist that I had not thought about, Broad Switch.
Last year, we laid out four different options states had in the eventuality that CSR payments would be terminated.
Most states opted to allow insurers to put the CSR incremental costs onto only the Silver plans. This is the “Silver Load” strategy that I’ve been talking about for over a year now. Silver loading makes everyone but for off-Exchange Silver buyers either better off or worse off. Silver loading requires these folks to either pay more or switch metal bands.
Some states, like California, took it a step further and had the CSR costs loaded onto only on-Exchange Silver plans with required near-mirror image off-Exchange only plans that had no CSR costs loaded. This is the “Silver Switch.”
The Silver Switch holds everyone harmless if people are willing to spend time shopping for a plan of the metal type that they like.
CMS is strongly recommending states to Silver Switch.
This is interesting. This improves the customer experience. It also gives a hint that Silver Loading is here to stay. I am updating my priors from Friday morning. I think Silver Loading is far more likely to be around for the 2020 plan year than I thought last week.