The head of the Centers for Medicare and Medicaid Services would not say Thursday if the Trump administration is considering setting limits on how insurers that sell Obamacare plans structure subsidies for their customers.
“I’m not going to comment on the agency’s deliberations,” CMS Administrator Seema Verma said when asked by the Washington Examiner about rumors that had circulated about the issue. When pressed about whether any conversations had occurred, Verma said, “I’m just going to leave it at that.”
Questions have been circulating about whether the Trump administration plans to block states from “silver loading” their coverage options so that premiums of Obamacare plans do not rise significantly for all of their customers.
The move, which heaps premium increases onto midlevel plans rather than across all offerings, allows subsidized customers to buy less expensive, or even no-cost, coverage. Insurers in most states began using this practice as a way to make up for President Trump’s cutoff of cost-sharing reduction payments, which help insurers reduce out-of-pocket costs for low-income customers.
Because insurers still have to offer these discounts to customers, they raised the costs of premiums, but only on midlevel, or “silver” plans. The practice is known as “silver loading” and allows insurers to shift costs and charge the federal government more in subsidies.
“It charges the government more and if it’s done the other way it can charge people more,” Verma said. “It does have an impact, not only on what the federal government is paying, but it also has an impact on the unsubsidized population. That is where we really continue to be concerned about the folks that are not being subsidized, where they are going.”
Roughly 8.7 million people receive Obamacare subsidies and 6.7 million people do not, because individuals making more than $48,240 do not qualify. As a result, this population feels the brunt of premium increases, while those who receive subsidies pay roughly the same for health insurance every year unless their income changes.
Health and Human Services Secretary Alex Azar said this week that discussions about blocking the common practice, if they have happened, haven’t reached him.
“It’s not an issue that has come to me yet,” he said Wednesday. “I’m not aware of that. I can’t tell you any discussions, deliberations around that issue aren’t going on, it just hasn’t come to me.”
