Regulators in California are letting health insurers build the death of a major Affordable Care Act subsidy program into their individual rates for 2018, in a way that may create a major opportunity for consumers to reach out to consumers.
The move will let issuers increase the full cost of mid-level, “silver tier” public exchange plan coverage, and only silver-level exchange plans, an average of 12.4%.
Managers of Covered California, California’s state-based Affordable Care Act public exchange program, and officials at the California departments that oversee insurance companies and managed care companies, announced the change today.
Open enrollment for 2018 is set to begin Nov. 1.
Issuers are making the CSR loss rate adjustment to protect themselves against the possible end of the Affordable Care Act cost-sharing reduction (CSR) subsidy. The CSR subsidy reduces the effects of deductibles, co-payments and coinsurance amounts on Affordable Care Act exchange plan users with income under 250% of the federal poverty level.
Low-income exchange plan users can also qualify for another subsidy: the advanced premium tax credit subsidy.
Because the CSR subsidy loss adjustment is so narrow, about 78% of the consumers who have been using the subsidy and take active steps to shop for new coverage for 2018 will face little or no increase in their actual out-of-pocket coverage payments as a result of the change, officials said.
The adjustment will mainly affect exchange plan higher-income users who qualify for little or no subsidy help, and even they may avoid the effects of the CSR subsidy loss adjustment by shopping carefully for coverage, officials said.