Tilleman Discusses Effects of ‘Silver Loading’ on Health Care Premiums

Senior Counsel Morgan Tilleman was quoted in a Managed Healthcare Executive article, “Six Things Healthcare Executives Should Know About ‘Silver Loading,’” about insurers’ practice of raising premiums for silver-level health care plans to make up for the loss of cost-sharing reduction payments from the federal government.

Tilleman said silver loading will continue next year because federal regulators didn’t have enough time to prohibit the practice before rate filings were finalized for plan year 2019. “I think HHS looked at the disruption and challenges for insurers and state regulators that would arise from a rushed prohibition on silver loading, so they delayed it at least until 2020,” he said.

While silver loading will cause consumers to shift to bronze or gold plans, it isn’t clear whether the practice will have a net effect on enrollment on or off the exchange, Tilleman added. “There have been so many moving pieces in the health insurance space over the last 18 to 24 months that it’s difficult to isolate the impact of any one change, including silver loading,” he said.

Because silver loading can make the popular on-exchange silver plans a relatively worse deal than bronze or gold plans, Tilleman said, state actions to promote active enrollment by current silver policyholders (into bronze or gold plans) can make a significant difference in whether silver loading is neutral (or perhaps beneficial) to individual insureds or whether it harms individual insureds overall (because they are auto-enrolled in expensive silver-loaded silver plans).