By Julie
Rovner JUNE 7, 2018
Federal
officials will not block insurance companies from again using a workaround to
cushion a steep rise in health premiums caused by President Donald Trump’s
cancellation of a program established under the Affordable Care Act, Health and
Human Services Secretary Alex Azar announced Wednesday.
The
technique — called “silver loading” because it pushed price increases onto the
silver-level plans in the ACA marketplaces — was used by many states for 2018
policies. But federal officials had hinted they might bar the practice next
year.
At
a hearing Wednesday
before the House Education and Workforce Committee, Azar said stopping this
practice “would require regulations, which simply couldn’t be done in time for
the 2019 plan period.”
States
moved to silver loading after Trump in October cut off federal reimbursement
for so-called cost-sharing reduction subsidies that the ACA guaranteed to
insurance companies. Those payments offset the cost of discounts that insurers
are required by the law to provide to some low-income people to help cover
their deductibles and other out-of-pocket costs.
States
scrambled to let insurers raise rates so they would stay in the market. And
many let them use this technique to recoup the lost funding by adding to the
premium costs of midlevel silver plans in the health exchanges.
Because
the formula for federal premium subsidies offered to people who purchase
through the marketplaces is based on the prices of those silver plans, as those
premiums rose so did the subsidies to help people afford them. That meant the
federal government ended up paying much of the increase in prices.
At the
committee hearing Wednesday, under questioning from Rep. Joe Courtney
(D-Conn.), Azar declined to say if the department was considering a future ban.
“It’s
not an easy question,” Azar said.
The
fact that the federal government ended up effectively making the payments
aggravated many Republicans, and there have been rumors over the past several
months that HHS might require the premium increases to be applied across all
plans, boosting costs for all buyers in the individual market.
Seema
Verma, the administrator of the Centers for Medicare & Medicaid
Services, told reporters in April that
the department was examining the possibility.
Apparently
that will not happen, at least not for plan year 2019.
Julie
Rovner: jrovner@kff.org,
@jrovner
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