Silver is platinum. Insurers should treat it as such. Regulators should make them.

Actuaries Greg Fann and Daniel Cruz have pointed out that the effects of silver loading in the ACA marketplace should intensify over time (as CBO forecast), with silver plan premiums rising relative to those of other metal levels, increasing discounts in gold and bronze. Fann and Cruz argue that regulators should help the process along by stipulating that insurers must price plans proportionate to actuarial value, with only limited adjustment for their estimates of "induced demand," the higher usage prompted by lower out-of-pocket costs.

In my last post, I cited evidence that the self-perpetuating engine that should increase silver loading effects over time worked in 2019, the second year that the practice was in effect. The average actuarial value of silver plans sold on HealthCare.gov rose measurably in 2019 as higher income enrollees switched to bronze and gold. Here I want to bring further evidence that this process advanced in 2019, and that silver premiums should accordingly rise more in 2020 than gold or bronze (or now-rare platinum) premiums.

Silver loading was a predictable and predicted after-effect of Trump's cutoff in October 2017 of direct reimbursement to insurers for the Cost Sharing Reduction (CSR) subsidies they are obligated to provide to low income enrollees who choose silver plans. Most states allowed insurers to price CSR into silver plans only, since CSR is available only in silver. Since ACA premium subsidies, designed so that the enrollee pays a fixed percentage of income, are set to a silver plan benchmark , inflated silver premiums create discounts for subsidized buyers in bronze and gold plans.

Thanks to CSR, the actuarial value of silver plans varies according to the enrollee's income. It's 94% at incomes up to 150% FPL, 87% at 151-200% FPL, and 73% at 201-250% FPL. At incomes over 250% FPL, silver has an AV of 70%.  Since silver loading began in 2018, enrollees with incomes below 201% FPL have mostly stuck to silver, while those in the 201-400% FPL range have switched in droves to bronze and gold. That means that average silver plan AV keeps rising: in 2019, over 75% of silver plan enrollees in states using HealthCare.gov had incomes under 201% FPL. As I showed in my last post, silver AV in HealthCare.gov states was up about one percentage point from 2018 to 2019. Average silver plan AV is well above that of gold plans, even accounting for off-exchange silver enrollees.

The movement away from silver at 200-400% FPL in HealthCare.gov states was dramatic in 2018 -- and progressed further in 2019.

Enrollment by metal level at 201-400% FPL in HealthCare.gov States

Year	Total bronze	% bronze	Total silver	% silver	Total gold	% gold	Total
2017	969,190	34%	1,706,780	60%	173,881	6%	2,851,601
2018	1,299,845	45%	1,251,385	43%	337,995	12%	2,891,851
2019	1,428,582	50%	986,957	35%	427,824	15%	2,863,824

The higher the income bracket, the more pronounced the shift out of silver.

Enrollment by metal level at 301-400% FPL in HealthCare.gov States

Year	Total bronze	% bronze	Total silver	% silver	Total gold	% gold	Total
2017	316,400	40%	409,600	52%	52,500	7%	786,678
2018	466,000	54%	284,400	33%	116,200	13%	867,198
2019	506,610	58%	210,295	24%	144,850	17%	870,637

 Source: CMS state-level Public Use Files.**

There was slower but substantial silver leakage at 150-200% FPL, from 83% silver selection in 2017 to 78% in 2018 to 76% in 2019. At 100-150% FPL, silver selection more or less held steady, upticking from 89.3% in 2017 to 89.7% in 2018 before dipping slightly to 88.3% in 2019.  Silver at 94% AV, requiring  2-4% of income for the benchmark, still outstrips the value of gold and bronze discounts.

CBO forecast that the full effects of silver loading would unfold over five years. Fann and Cruz argue that regulators should push insurers to price gold below silver now.  To my mind, rising bronze takeup highlights the urgency.  Bronze plans, at 60% AV and deductibles averaging over $6,000, are really not appropriate for anyone but the affluent. Coverage at at least 80% AV ought to be affordable to everyone. Pricing gold below silver puts that rather modest goal in reach, providing a much needed back-door CSR to people in the 200-400% FPL range. Pushing insurers in this direction is a fast, cheap -- actually free -- way for states to reduce uninsurance and underinsurance, offloading all the cost on the federal government.

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* By now, most states also allow or encourage insurers to offer silver plans free of the silver load off-exchange, since CSR is only available on-exchange. CSR-free silver holds unsubsidized enrollees harmless for the cost of CSR - and intensifies silver loading in the on-exchange plans for which CSR is available. In theory at least, the whole cost is thus borne by the federal government in the form of higher premium subsidies.

* * In the PUF files (2017, 2018, 2019), enrollment totals at each metal level are given as a whole-number percentage of all enrollment at that metal level. I have added together those rounded totals at income brackets ranging from 200-400% FPL. The rounding creates some slight distortion.

The 2017 PUF does not break out gold enrollment by income.  To derive gold for 2017, I subtracted bronze + silver from total enrollment in the income bracket and subtracted 1% of the result for catastrophic + platinum enrollment, an estimate based on 2019 results.