Experts Doubt CMS Will Issue Silver Loading Ban

From Health Plan Weekly

CMS Administrator Seema Verma recently indicated the agency might ban the practice of "silver loading" — a strategy that states and insurers devised to cope with losing reimbursement for cost-sharing reduction (CSR) subsidies. Health care policy experts doubt whether the administration will make such a move, as the banning could price many consumers out of the Affordable Care Act (ACA) marketplaces.

"I just don’t think they’ll do it as a practical matter," says Joel Ario at Manatt Health. "I think when they get into the details of it, they will discover that it would be hugely disruptive."

Katherine Hempstead, Ph.D., senior adviser to the executive vice president at the Robert Wood Johnson Foundation, suspects CMS isn’t that serious about banning silver loading. "I kind of can imagine them saying it’s under review even if it’s not really under review," she says.

Given that states have the authority to regulate their own plans and determine premium rates, they might challenge the legality of a federal rule that tries to usurp that authority, according to Chris Condeluci, principal of CC Law & Policy.

Yet he points out that states would be less likely to successfully challenge a more "indirect" tactic, like tweaking risk adjustment rules to discourage the practice of silver loading.

For her part, Hempstead says she could imagine the administration trying to work out a compromise with insurers, essentially setting limits on how much of the CSR costs they could load on their silver plans and asking them to spread the rest throughout the other metal levels.

Hempstead thinks that if the administration bans the practice, insurers might push back and consider pulling back from the ACA exchanges. If the administration chose not to make such a policy effective until 2020, that might at least give insurers more breathing room to adjust to other factors that will making plan pricing complicated in 2019.
 

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