TRP’s Shea McCarthy Quoted in Inside Health Policy on HHS’ Decision to Embrace ‘Silver-Loading’

In an Inside Health Policy article published on Wednesday, June 6, Thorn Run Partner’s Vice President Shea McCarthy discussed HHS Secretary Alex Azar’s recent indication that the HHS will not block “silver-loading” of insurance plans for 2019. As Mr. McCarthy explained, “while the Trump administration’s approach to ACA implementation has led many advocates to embrace the notion that HHS would seek to undermine Obamacare at all costs, Secretary Azar’s decision to embrace the practice of ‘silver-loading’ sends a slightly different signal.” As he pointed out further, the administration likely recognizes the political implications of significant premium increases coming during the height of election season, and may be sensitive to the fact that they could invite further scrutiny by taking additional steps that would increase costs.

The article in its entirety can be found below:

Azar Says HHS Won’t Take Action To Stop Silver Loading For 2019

HHS Secretary Alex Azar told lawmakers that agency won't make changes to silver loading practices for 2019 because there is not sufficient time to go through the rulemaking process before plans solidify their rates for next year. This affirmation follows weeks of speculation that the agency would get rid of the cost-sharing practice for 2019. Health policy stakeholders and policy experts welcomed the news, saying such a move could help prevent further instability in the marketplaces.

During a Wednesday (June 6) hearing on HHS' 2019 budget request, Rep. Joe Courtney (D-CT) asked Azar whether HHS is planning to mandate “broad loading” for 2019. He added that if HHS were to enforce broad loading, rather than silver loading, this could result in “large premium increases” for all consumers on the individual market.

“That would require regulations that could not be done for the 2019 period in any event,” Azar said. “We’re working and addressing that. It's not an easy question whether one should attempt to force or even encourage movement of that loading onto the bronze and gold because that impacts individuals on those plans also. So I don’t think it’s actually a facile question how one addresses that,”

“My sense is that changing silver loading is not an administration priority. I don't expect that to change,” Azar added.

In March, both Azar and CMS Administrator Seema Verma fielded questions from reporters about rumors that the agency was looking to block silver loading in 2019. At the time, Azar said that he was not aware of any discussions surrounding silver loading, but Verma expressed concerns over the impact of silver loading on unsubsidized consumers.

The so-called silver-loading workaround was deployed by most state insurance commissioners last fall to mitigate the impact of the Trump administration’s decisions to end cost-sharing reduction subsidies. Under the practice, carriers placed rate hikes associated with the lack of CSRs on the silver-level products only, which boosted the advanced premium tax credits available to consumers and resulted in many people getting low-cost or no-cost plans.

In April, CBO for the first time added silver loading to the Affordable Care Act’s baseline, due to the Trump administration’s decision to end CSR payments.

Stakeholders and policy experts breathed a collective sigh of relief upon hearing Azar’s announcement.

“With open enrollment for 2019 approaching, we are pleased that there will be certainty around this issue.” BlueCross BlueShield Association Vice President of Legislative and Regulatory Policy Kris Haltmeyer told Inside Health Policy.

BCBSA last week told reporters they were concerned about potential administration intervention on silver-loading and that blocking insurers from silver loading could cause “disruption and uncertainty in the markets, which could lead to higher premiums for all consumers.

While the Trump administration’s approach to ACA implementation has led many advocates to embrace the notion that HHS would seek to undermine Obamacare at all costs, Secretary Azar’s decision to embrace the practice of 'silver-loading' sends a slightly different signal,” Thorn Run Partners Vice President Shea McCarthy explained.

As 2019 rate increases have trickled out the past few weeks, Democrats have used rising premiums as ammunition to attack the GOP for tampering with Obamacare.

“Silver-loading is very important to improve affordability in the exchanges for the subsidized population, and especially with the repeal of the individual mandate and potentially other threats to non-group coverage levels taking effect next year, affordability is the last line of defense for coverage levels,” Families USA Director of Health Policy Eliot Fishman said.

Although Azar has committed not to make changes to silver-loading for 2019, some are worried the agency could take such action in 2020.

“There is never a good time to enact a change that only serves to raise costs on hardworking Americans. This option shouldn't be on the table in 2020, or any year for that matter,” Health Action New Mexico Director of Policy and Communication Colin Baillio stated.