In case the federal government moves to ban 'silver-loading,' the plaintiffs are trying to keep their legal options open.
Eighteen states suing the Trump administration over its decision last fall to halt cost-sharing reduction (CSR) payments under the Affordable Care Act asked a federal judge Monday to put their proceedings on hold.
Despite acknowledging the success of a workaround known as "silver-loading"—which allows insurers to offset the cost of the unfunded CSR subsidies by raising premium prices for middle-tier plans on the ACA exchanges—the plaintiffs argued that the judge should keep their legal options open, in case the federal government moves to prohibit the silver-loading stopgap.
"In a situation such as this, the States would normally move to dismiss the present action, without prejudice to their ability to file a new complaint when the circumstances changed," the plaintiffs wrote in their filing. "Here, however, the States respectfully suggest that the better course would be for the Court to stay these proceedings but to retain jurisdiction over them, at least for the time being."
The plaintiffs, led by California Attorney General Xavier Becerra—who pledged last month to defend the ACA against a separate challenge in Texas after the federal government declined to defend the constitutionality of key provisions in the Obama-era law—argue that certain Trump administration officials have already indicated their desire to chip away further at the ACA by blocking silver-loading.
"There is accordingly every reason to be wary of the possibility of sudden, unilateral, and irresponsible federal action that could call for turning swiftly back to the issues presented by this case," the plaintiffs wrote.
- Past statements: Centers for Medicare & Medicaid Services Administrator Seems Verma said in March that she is "very concerned" by silver-loading, the plaintiffs wrote, citing media reports. In April, Verma said the Trump administration is looking into prohibiting states from using the workaround. Health and Human Services Secretary Alex Azar told Congress that the administration would not block silver-loading for 2019, though he did not offer that assurance for 2020 and beyond, the plaintiffs noted.
- Workaround has worked: Silver-loading has "largely protected subsidized consumers from the harm inflicted by the decision to end CSRs, and provided some stability to help ensure a functioning insurance market," the plaintiffs wrote, citing a Health Affairs article. The workaround has also lowered premiums for low-income consumers, as the National Academy for State Health Policy reported.
- But premiums are on the rise: Citing analysis by the Kaiser Family Foundation, the plaintiffs said 2019 premiums nationwide are projected to increase 7-36% "due to the uncertainty in the individual market driven by, among other things, the end of CSRs." That has hit unsubsidized consumers especially hard, the plaintiffs argued.
- Rising premiums as impetus: The government has cited rising premiums as a rationale for expanded access to non-ACA-compliant short-term limited-duration and association health plans.
If the government were to block silver-loading, it would further destabilize the individual market and push premiums higher for all ACA exchange plan tiers, the plaintiffs argued.
The defendants in this case indicated opposition to the states' request for a stay, preferring instead that the matter be dismissed without prejudice, according to the filing.
Steven Porter is an associate content manager and Strategy editor for HealthLeaders, a Simplify Compliance brand.