Consulting Actuary Greg Fann was recently quoted in Inside Health Policy on opportunities to enhance ACA markets.

“Greg Fann a consulting actuary with Axene Health Partners has also been working to get the word out about the potential to raise the subsidies to gold level.

He and a colleague first raised the issue in a 2019 blog.

Fann says that at the time he also thought, since the ACA is such a regulated market, silver-loading would be conducted in a consistent manner.

But after analyzing the outcome on a national scope, he realized there was significant variance throughout the country. Some states were were reaping what Fann called “fields of gold” via the increased subsidies, while others were missing out.

Fann and his colleague Daniel Cruz offers several recommendations to state regulators who may be seeking to maximize the subsidies.

First, like Sprung and Anderson, they say regulators could mandate that insurers price their silver plans assuming that 100% of enrollment is consumers with the highest value CSR. This would end inequities among insurers that have different shares of CSRs enrollees, while helping to get those consumers out of the silver-tier plans, they explain. Other solutions include: mandating that insurers price their silver-loading based on the benefits rather than reimbursing the CSRs dollar-for-dollar; limiting the “induced demand” differences between metal levels to a maximum of 10%; and allowing consumers earning more than 200% of poverty to be automatically enrolled into the least expensive gold-level plan. Many enrollees not in the 87/94% CSR group have stayed in the silver plans despite the poor value, and automatic re-enrollment could alleviate that problem, they write.

Making these tweaks would benefit families earning less than 200% of poverty by allowing them to continue getting platinum-level coverage at no extra cost. It would help families making 200%-to 400% FPL by increasing subsidies to the gold level and even those above 400% because it would boost enrollment which typically improves the risk pool, which lowers costs. The changes would benefit insurers by incentivizing purchase of gold plans and allowing state regulation to fully level the marketplace rules to bring better coverage to more enrollees.

Fann tells Inside Health Policy that many state regulators did not realize the potential to maximize subsides since the market is so convoluted and such little attention was being paid to it. Then, for the 2020 plan year, regulators were worried the Trump administration could make another rule change, rendering any changes obsolete and wasting time, so they did not act.

Going into 2021, Fann says, more states expressed interest in the recommendations.”

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