User:NormSpier/PPACARemovedCostSharingRedReference

A subsection added by me Aug 2019 to ACA article on the cost-sharing-reductions sub-section of the "provision" section. From comments in an RFC of Sept 2019, it became clear there were problems with hitting "original research" as interpreted by some of the editors associated with the article. (My own view, perhaps independent of whatever Wikipedia written standards may exist on the topic, is that anything I had not documented by references was obvious to people who both knew the law, and/or could reason in basic economic and actuarial mechanism.) (See the RFC, where specific parts were identified as "original research".)

For this subsection, the subsection is actually really necessary, and a glaring deficiency of the ACA article. (Someone besides me pointed this out in "talk" for that article.) The cost-sharing subsidies are a major provision. (Referred to elsewhere in the ACA article, without saying what they are, which would be in this sub-section.) However, the "original research", as interpreted locally, made it too massive an amount of work to get the section in, particularly since the key "silver loading" response of many or most states to the Trump stopping of cost-sharing-reductions compensating insurer payments (substantially nullifying the Trump action) leads to too much "original research" to explain.

So, viewing it as keeping the glaring deficiency of the ACA article, I've nonetheless agreed to drop the subsection permanently. Perhaps if ACA article editors, knowlegeable about the subject matter, return to the project, they can fix the glaring deficiency in a way consistent with the locally-interpreted Wikipedia "oringial research" standards..

Cost-sharing Reductions
Separate from premium subsidies, people eligible for premium subsidies, who, in addition, have Modified Adjusted Gross Incomes (MAGIs) between 100% and 250% of the Federal Poverty Level (FPL), receive also, if they purchase silver plans, cost-sharing reductions (CSRs) on their policies. This means the policies have reduced out-of-pocket maximums, and the policies must have increased actuarial values, which tend to give them reduced copayments compared to policies without cost-sharing reductions.

The reduced out-of-pocket maximums, and increased actuarial values, are on a sliding scale.

For 2019, silver plans normally have a maximum copay of $7900 / $15,800 (individual/family), and have a required actuarial coverage value of 70%. For for individuals with MAGIs of 100-150% MAGI, the maximum copay is $2,600 / $5,200, and the required actuarial coverage is 94%. For individuals with MAGIs of 200-250% MAGI, the maximum copay is $6,300 / $12,600, and the required actuarial coverage is 73%.

Before 2018, cost-sharing-reductions were funded directly by payments of the Federal government to insurers, so that the cost of silver plans did not need to be higher than what they would have been without cost-sharing reductions.

President Trump, by executive action on October 12, 2017, ended the direct payment by the Federal governments to insurers, effective Jan 1, 2018. At the time of action, it was observed that this would necessitate the raising of premiums on at least some health plans, and possibly all plans.

However, many states reacted to the loss of the Federal payments to insurers by either directing, or allowing, insurance companies to assess the actuarial costs of the lost Federal CSR payments to silver plans only, or sometimes, to silver plans purchased on the exchange only. (The practice was called "silver loading".)

Where there is silver loading, the effect is to often give people who received premium subsidies who purchased silver plans, roughly the same net-of-premium-subsidy costs as before the Federal payments were stopped. (This is because premium subsidies are determined by a formula to make the second lowest cost silver plan cost a certain fixed percentage of MAGI, so that the increased premiums were accompanied by a commensurately increased subsidy.)

Further, where there is silver loading, premiums for bronze, gold, and platinum plans are unchanged. (So a person not receiving a subsidy could avoid increased costs by avoiding silver plans.)

(Note that it may be possible for a Presidential administration to ban silver loading in the future, so in that case, the consequences of the lost CSR payments would be more severe. )

It should also be noted in the cases of states or insurers who did not do silver loading, the cost of all plans will increase, and this will yield increased costs to those who receive no premium subsidy

Cost-sharing reductions are also sometimes called cost-sharing subsidies.