Street sign that says "silver lining ahead"

What are silver plans? Silver is one of four categories, or “metal levels,” of health insurance marketplace plans. If you qualify for cost-sharing reductions (or “extra savings”), you can save on out-of-pocket costs — such as deductibles, copayments, and coinsurance — but only if you pick one of the Obamacare silver plans.

Why Are Silver Plans Different Now?

As you may know, the Trump administration recently decided to end cost-sharing reduction (CSR) payments. These payments went to insurance companies, allowing the companies to lower the cost of out-of-pocket costs for low-income consumers. Now that the payments have officially stopped, insurance companies have had to make a tough decision in order to ease their losses and stay in business: drastically increase the premium cost for silver plans.

Although this is bad news for insurance companies, it may be good news for consumers on the marketplace. Why? Because the steep premium hikes that have been applied to silver plans have had an unintended (but positive) effect on premium subsidies.

Silver Plan Premiums Spiked; Others Didn’t

Because the CSR subsidies only affect the marketplace’s silver health insurance, prices were increased on these plans by an average of 37 percent to help insurance companies recoup the loss of these payments. However, other metal level plans were not as affected by CSR payments. So other metal level plans (such as platinum, gold, and bronze), will not see the same significant spike in premium costs.

There are a few states that did not allow insurance companies to only increase silver plan premiums. For individuals in those states, all metal level plans will see premium increases.

An Unintended (But Positive) Result: Free Health Insurance for Some

One positive side effect of silver health insurance premiums increasing that you might not have anticipated is the increase in premium subsidies. This is because premium subsidies are determined by both income and the second-lowest silver plan premium available in your area. So, the premium subsidy you receive (if eligible) will increase as the premiums of Obamacare silver plans increase.

Also, premium subsidies can be used on any metal level plan. The amount of your subsidy will not change based on the metal level plan you choose. You could end up with a gold plan that costs less, and has better coverage, than a silver plan. For people with certain income levels, the increased premium subsidies could be used to end up with a free bronze plan with a zero premium.

Not Eligible for a Subsidy?

For those who are not eligible for premium subsidies, there is another way to sidestep increasing silver health insurance premiums: Shop outside the marketplace. Why?

  1. Obamacare silver plan premium increases are associated only with CSR payments.
  2. CSR payments are only for plans available on the marketplace.
  3. Plans off the marketplace were not affected by the loss of these payments, so there is no need to hike premium rates.

This is ideal for individuals who want silver plans but can’t get a subsidy. A licensed agent can help you compare off-marketplace options available in your area.

Go for Gold (or Platinum or Bronze) This Year

If you are one of the 84 percent of marketplace enrollees eligible for a premium subsidies, it may be worth your while to purchase a gold plan this year. Platinum plans may now be within reach, but be sure that your subsidy covers the extra costs before signing up. And finally, those within certain income levels should consider finding a $0 premium bronze plan.

Either way, HealthMarkets is here to help. Our licensed health insurance agents can help you determine your subsidy eligibility, shop on and off the marketplace, and find the best coverage to suit your needs and budget. Give us a call today at (800) 304-3414, or find an agent near you.


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