For those who make too much money to qualify for health insurance subsidies on the individual market, there may be no Goldilocks moment when shopping for a plan. No choice is just right.
A policy with an affordable premium may come with a deductible that's too high. If the copayments for physician visits are reasonable, the plan may not include their preferred doctors.
These consumers need better options, and in early August federal officials offered a strategy to help bring down costs for them.
The guidance is from the Centers for Medicare & Medicaid Services, which oversees the insurance marketplaces set up by the Affordable Care Act. CMS is encouraging states to allow the sale of plans outside of those exchanges that don't incorporate a surcharge insurers started tacking on last year.
Many insurers added the premium surcharges last fall to plans sold on the individual market. It was a response to the Trump administration's announcement that it would no longer pay the companies for the "cost-sharing reduction" subsidies required under the health law. The subsidies help cover deductibles and other out-of-pocket costs for lower-income consumers who buy marketplace plans.
Insurers typically added the cost to silver-level plans because those are the type of plans that consumers have to buy in order to receive the cost-sharing subsidies. "Silver loading," as it's called, added an estimated 10 percent to the cost of those plans, according to the Congressional Budget Office.
People who qualified for federal premium subsidies -- those with incomes up to 400 percent of the federal poverty level (about $48,000 for one person or $100,000 for a family of four) -- were shielded from the surcharge because their subsidies increased to cover the cost.
But people with higher incomes faced higher premiums. The new guidance is geared to help them.
"It encourages states to encourage silver loading only on the exchange," said Aviva Aron-Dine, vice president for health policy at the Center on Budget and Policy Priorities.
But some analysts say they're unsure if the new federal policy will make a difference since states have already implemented similar strategies.
Many states moved last fall to limit silver loading to plans sold on the exchanges, while allowing or, in the case of California, requiring, very similar plans to be sold off the exchanges without the extra premium charge.
Eighty-three percent of people who bought a plan during the open-enrollment period for 2018 qualified for premium tax credits. The average monthly premium per subsidized enrollee was $639; after accounting for premium tax credits, however, enrollees owed just $89 on average. That amount was 16 percent lower than the monthly premium the year before.
For people who don't qualify for premium tax credits, the picture is very different. The average monthly premium for 2018 was $522. That total was 28 percent higher than the previous year's total of $407, according to an analysis by the Center on Budget and Policy Priorities of CMS enrollment data.
In general, federal rules require that insurers charge the same rates for identical qualified health plans that are sold on and off the exchanges. The CMS guidance suggests that the unloaded plans could be tweaked slightly in terms of cost sharing or other variables so that they are not identical to those on the marketplaces.
Tracing what type of coverage is purchased off the exchange is difficult because there is no centralized source. Consumers can buy plans directly from insurers, or they may use a broker or an online web portal. According to one such portal, eHealth, 28 percent of unsubsidized consumers on its site bought silver plans in 2018, while 42 percent bought bronze plans, whose coverage is less generous than silver plans and typically have lower premiums. Conversely, on the exchanges nearly two-thirds of people bought silver plans in 2018 while 29 percent bought bronze plans, according to federal data.
If fewer insurers add the CSR load to silver plans sold off the exchange, those plans may be more affordable next year than they were in 2018, said Cynthia Cox, director of health reform and private insurance at the Kaiser Family Foundation. (Kaiser Health News is an editorially independent program of the foundation.)
"This makes silver plans an option for [unsubsidized] people who wanted to buy a silver plan but might have been pushed off onto a bronze plan," she said.
Consumers who want to consider off-exchange plans have to find them first. Some experts suggest checking with insurers that are selling on the marketplace in an area, because it's possible that they'll also be selling plans off the exchange.
But that's not a given. A health insurance broker can help people find and evaluate plans sold off the exchange. But experts urge consumers to stay on their toes and make sure they understand whether the plans they're considering provide comprehensive coverage.
Starting in October, insurers can offer short-term plans with limited benefits that last up to a year.
"Differentiating between the two may not be easy, and the off-exchange unsubsidized market is the target market for short-term plans," said Anderson.