Roughly 400,000 Coloradans buy health insurance on their own, and those plans are about to see a major change with a funny name that could have a huge impact on what people pay for coverage. The term is “silver loading,” and here are some answers to questions about what it means and why it’s important.

In one sentence, what is silver loading?

Silver loading is a health policy judo move that takes the higher prices of health insurance plans following a critical decision by President Donald Trump last year and flips them into higher tax credits to help people pay for insurance.

How does silver loading work?

You have to understand the basic tiers of insurance available on the individual market — that’s where people who don’t have employer-sponsored or government plans buy health care coverage. Silver is the midrange tier, between bronze on the lower end and gold on the higher end. But, for a couple of key reasons, silver is special.

First, when the federal government calculates how much people are eligible for in tax credits to help pay for insurance premiums, it bases those calculations on a silver plan. Thus, if that silver plan increases in price, so do the credits available to help pay for insurance.

Second, silver plans are the only plans where low-income people who don’t qualify for Medicaid can receive so-called “cost-sharing subsidies.” Insurers are required to pay those subsidies — which cover the back-end costs of insurance, such as deductibles — but the Obama administration reimbursed insurers for them. Trump ended that, causing insurers to find ways to build the cost of those subsidies into their plans.

This brings us to silver loading. When states tell insurers they have to “silver-load,” it means that insurers can only pile those extra costs into the prices of silver plans — dramatically increasing their price but also dramatically increasing the tax credits available to many to help pay for them. That’s exactly what Colorado is telling insurers to do this year.

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Source:: The Denver Post – News

      

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400,000 Coloradans who buy their own health insurance are facing a big change this year

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