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| Gold skies, but almost no gold Obamacare, in New Jersey |
On May 22, New Jersey state Senator Joseph Vitale, chair of the Health, Human Services, and Seniors Committee, introduced a bill (S3896) that mandates “premium alignment” — a.k.a. strict silver loading — in the state’s individual and small group health insurance markets. That is, insurers would be required to comply with the letter of the ACA statute that requires them to price plans at different metal levels in strict proportion to the actuarial value of each metal level. (Actuarial value refers to the percentage of the average enrollee’s costs the plan is designed to pay for, according to a formula promulgated by CMS.)
In effect, mandating that strict proportionality means pricing gold plans below silver plans with the same network (or, in New Jersey in the first year after enactment, roughly at par with silver plans, as explained below). That’s been the case since 2018, the first plan year after Trump cut off direct reimbursement of insurers for the value of Cost Sharing Reduction (CSR) subsidies, which attach to silver plans only. The cutoff induced most states to direct insurers to price CSR into silver plan premiums only, a practice that came to be known as silver loading. CSR raises the actuarial value of a silver plan to a roughly platinum level** for enrollees with income up to 200% of the Federal Poverty Level — — that is, for about 80% of on-exchange silver plan enrollees nationally (though far less in New Jersey, as discussed below). In 2023, the average actuarial value among silver plan enrollees on all ACA exchanges was about 87%, compared to 80% for gold plans.*
