As President Donald Trump hacks away at the Affordable Care Act (ACA) with his pen, the changes to the healthcare law can be hard to track. The people who really need to pay attention, however, are those signed up for or considering silver-level plans in the individual marketplace.
Trump recently signed an executive order that would stop paying cost-sharing reductions (CSR) to insurers. These payments reimburse insurers for giving a discount to policyholders whose income is between 100% and 250% of the federal poverty line. These discounts, are only available to people who buy silver plans on the exchanges. They reduce the amount policyholders pay for deductibles, copayments and coinsurance and give them a lower out-of-pocket maximum.
Keep an eye on silver plans
Silver plans are typically more comprehensive and costly than lower-level bronze plans, but the CSR discounts can make them the cheapest option in the marketplace for people who qualify. Ending the CSR payments will increase payments for many people with silver-level plans, but not all. Those who sign up for plans through the marketplace also receive tax credits they can apply to the their premiums if their income is between 100% and 400% of the federal poverty level.
If insurers raise premiums to make up for the loss of the CSR payments, the tax credits, which are linked to the cost of premiums, also increase. The people who will have to pay more are the those who make too much to qualify for any subsidy. Robert Laszewski, a health consultant writing in National Review, estimated that about 2.1 million people purchasing through the exchanges don't get a subsidy.
Many states have responded by asking insurers to raise the premiums solely on silver-level plans. California is requiring insurers to include a "surcharge" on silver-level plans, expecting that most policyholders will qualify for a tax credit and therefore won't pay more. Other states are doing the same. David Anderson, a former healthcare analyst who is tracking the state response to the CSR cuts on his blog Balloon Juice, reports that 25 states have loaded the extra costs on silver plans.
What market shoppers can do
None of this helps anyone who normally buys a silver plan but doesn't qualify for a tax credit. If you're one, looking at a different level plan may be a good idea. Especially if you live in a state that is increasing silver premiums in response to the CSR cuts, a gold plan could end up being more affordable. We've been tracking how states are responding to Trump's CSR announcement in our state-by-state guide to 2018 Obamacare open enrollment.
You may also want to explore your options outside of the marketplace. Individual health insurance is also available off the exchanges and these policies are sometimes more affordable for people who don't get subsidies because insurers have more flexibility when structuring these plans. (Side Note: You need to buy a plan on-exchange to get the premium credit.) Check out our guide to shopping for health insurance if you plan to take your business elsewhere.
Finally, if you opt for a plan with high deductible, a Health Savings Account (HSA) can help you save for out-of-pocket medical expenses. You can learn more about HSAs here.