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That means higher premiums. In most states, insurers raised their rates considerably for 2018 based on the assumption they would not receive the CSR payments. In many cases, the insurers explicitly stated just how much the CSR issue alone would drive up rates, with hikes ranging from 7 percent to 38 percent, according to a
That might look bad on paper, but many Americans are likely to benefit from the change.
Obamacare offers different types of plans with a range of deductibles, each with its own “metal” tier: bronze, silver, gold and platinum. Only silver plans qualify for CSR benefits. As a result, most state regulators and insurers have decided to confine CSR-related premium increases to the silver plans on the exchange, since they’re the only ones affected.
The amount of subsidies customers get through Obamacare is based on the cost of a silver plan in their area. That means that when premiums shoot up on the silver plans alone, it gives customers who qualify for federal help more money to buy bronze, gold and platinum plans at cheaper rates than they could before.
In Scranton, Pennsylvania, for example, a 40-year-old man making $31,000 a year can currently find a bronze plan with a monthly premium of $27.64 on Healthcare.gov, a silver plan for $214.50 and a gold plan for $146.88.
Not everyone will have these options, however. In a handful of states, like Colorado, premium increases are being spread across all tiers, while in others, the changes vary by insurer.
Who loses out
The people hardest hit by the CSR cutoff are insurance customers on the individual market who make too much money to qualify for financial assistance through Obamacare, which ends at 400 percent of the federal poverty level (about $48,000 for an individual).
While customers with subsidies are shielded from rate increases, those without them may have to pay more. Even without the premium increase caused by the CSR issue, insurers have raised rates substantially due to either the broader uncertainty surrounding the Affordable Care Act or because they’ve had difficulty attracting healthy enrollees.
“The biggest concerns we hear now are from consumers who are not getting a subsidy,” Packham said. “They’re starting to reach out to us and saying our plan is going up two, three, four hundred dollars a month and asking for advice.”
But they may have ways to minimize the impact. In many states, premiums for silver plans are soaring, but only if they’re sold on the Obamacare exchanges. The same insurers sometimes offer similar plans off the exchanges that are ineligible for subsidies, which makes them unaffected by the change in CSR payments.
In Pennsylvania, for instance, the state’s insurance commissioner is
urging customers who don’t qualify for subsidies to look off-exchange, where the commissioner’s office worked with insurers to make sure premiums were not affected by the CSR changes.
Insurers and health care advocacy groups are doing their best to explain the Obamacare situation to customers, but people interested in buying health care should plan on doing some serious research to find the best deal.
“It’s going to vary wildly by county and carrier,” Gaba said. “It’s kind of a mess.”