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| Does the NJ marketplace need a Huckabee-sting? |
The looming expiration of the enhanced Premium Tax Credits in the ACA marketplace (ePTC) increases the salience of the extent to which different states encourage or enforce strict “premium alignment,” A.K.A. silver loading, the pricing of the full value of Cost Sharing Reduction (CSR) into silver plans.
Here, we’ll contrast current plan offerings in a state marketplace with some of the most extreme silver loading effects, Arkansas, with a state where the effects are among the weakest, New Jersey.
If you are unfamiliar with how silver loading works or why it exists, see the explanation at bottom.
To defend against the looming expiration of the enhanced ACA subsidies funded only through 2025, Arkansas implemented the nation’s strictest “premium alignment,” requiring insurers to price silver at 1.46 times what it would be priced at the baseline silver actuarial value of 70%. That is, Arkansas requires insurers to price silver plans as if all silver plan enrollees have income under 200% FPL and so obtain plans with actuarial value of 94% (the AV of CSR-enhanced silver for enrollees with income up to150% FPL) or 87% (silver AV for enrollees in the 150-200% FPL income bracket) — an average AV of 91%. For a convoluted tale of how Arkansas arrived at this point, see Charles Gaba.
Pricing silver as if all enrollees have income under 200% FPL is meant to be a self-fulfilling prophecy. A “CSR factor” like Arkansas’ ensures that gold plans will be cheaper than silver plans with the same provider network, making silver plans an illogical choice for enrollees with income over 200% FPL, since gold plans have a higher AV than silver for enrollees above that income threshold. That assumption has been borne out in the Texas marketplace, where in 2025, just 1% of the state’s 1.9 million silver plan enrollees had income over 200% FPL.* In 2025, 78% of silver plan enrollees in Arkansas obtained 94% AV or 87% AV. The average weighted AV for silver plan enrollees in the state was 86.8%. It’s not a great leap to assume average silver plan AV of 91% under the current pricing regime.
Thanks to this pricing formula for silver plans, Arkansas has the nation’s widest premium spread between the average lowest-cost bronze plan and the average benchmark (second cheapest) silver plan. On average, the premium for the lowest-cost bronze plan in Arkansas is just 57.8% of the benchmark silver premium. Gold coverage in Arkansas is also very cheap, averaging just 83.6% of the benchmark. On that front, Arkansas is tied with Pennsylvania for fourth-lowest in the nation.
