Marketplace Pulse: After the Silver Load

CMS recently announced some big shifts in marketplace enrollment by metal in 2018. Due to the quirks introduced by the elimination of cost-sharing reduction payments (CSRs), subsidy-eligible customers often found they could get better deals by choosing bronze or gold. The share of marketplace enrollees in bronze plans, in particular, increased from 23 percent to 29 percent. Among those new to the marketplace, the trend toward bronze was even greater—34 percent of new enrollees on healthcare.gov chose bronze plans. Yet this shift to bronze may have some unintended consequences for individuals and health care markets, since cost-sharing differs significantly by metal.

Marketplace plans as a rule have high deductibles; the medians for bronze, silver, and gold plans in 2018 are $6,400, $3,800, and $1,250, respectively. But size is not all that matters. Bronze plans not only have the biggest deductibles, but they are also the least likely to have cost-sharing for health services.

There are three main ways that marketplace plans provide cost-sharing before the deductible. The most common (more than 50% of all plans) uses co-insurance or even more often, a co-pay, usually $30. About 15 percent of all plans use one of two volume-dependent options that relate cost-sharing to the number of visits. For example, some plans provide a limited number of no-cost visits, and then switch to a co-pay or co-insurance until the deductible is met. A more austere option is to have a limited number of free or low co-pay visits, after which the deductible must be met. But about 30 percent of all market plans do not permit any cost-sharing at all until the deductible is met. 

Using primary care as an example, we can see there are big differences by metal, particularly between bronze and silver. For example, 62 percent of bronze plans require that the deductible be met before any cost-sharing for primary care, while this is the case for less than 25 percent of silver and about 18 percent of gold plans. One clear takeaway is that the gap between bronze and silver is wide, and the choice of bronze can have big affordability implications for low-income consumers, since the average office-based primary care visit costs more than $100.

There is also spatial variation in cost-sharing characteristics, reflecting insurer differences and the geography of market participation. Due to both supply and demand factors, the impact of this shift to bronze is likely to vary by market. Consequences for individuals and providers could include underutilization of care or an increase in bad debt. Another outcome could be higher use of retail clinics, where visit prices are lower, or greater use of cheaper cash market options, if the prospect of meeting the deductible seems unrealistic. Consumer dissatisfaction and lapsed enrollment is another possibility if plan characteristics are not well understood, although the very low premiums should be helpful in that regard.

Barring any surprise announcements from CMS, silver loading is likely to continue next year and will probably expand to more states. While silver loading has increased affordability for many subsidized consumers, and the low bronze premiums are attractive, the benefit design may prove challenging. Consumers, providers, plans, and regulators will be assessing their respective experiences, with the potential for further adjustments in plan design and/or metal choice going forward.