Bronze Could Be The Silver Lining In ACA Plans

By Michael Z. Stahl

You’ve heard the news about this year’s Affordable Care Act premiums going up. It’s just one more hit to the state and federal insurance exchange plans. Congress has tried to repeal and replace the ACA, or tried to create a whole new public system. Bipartisan efforts are struggling to stay alive. President Donald Trump has declared the law “dead.”

Even with all the political jostling, the open enrollment period is upon us. It may only be 45 days long, but there is a good-news secret hidden in this year’s sign-ups. They say every cloud has a silver lining. This year, that lining is more likely to be bronze. Through a combination of presidential decisions, insurance company reactions and ACA regulations, it has never been easier for consumers to purchase zero-premium bronze plans, if consumers qualify.

How Raising Premiums Is Helping More Consumers

It sounds counterintuitive that the spike in 2018 premiums we’ve been hearing about would open a window of opportunity for anyone, but that’s just what happened.

Trump had long hinted that he would halt funding for cost-sharing reduction (CSR) subsidies to carriers. He made it official on Oct. 13. Knowing they were going to lose this reimbursement from the government, the insurance companies responded. CSRs are applicable only to silver plans, so carriers raised the premiums on silver plans so that they could continue to be able to stay in the marketplace. Other carriers simply dropped out.

How these moves would affect the exchanges was pure speculation until last week when the healthcare.gov site provided a preview of 2018 premiums. Analysis shows that silver plan premiums for 2018 are up an average of 37 percent compared with this year. That’s almost double the increase for bronze and gold plans. For the 15 percent of people with ACA plans who make too much to receive premium subsidies (tax credits), this is going to hurt. But for your lower- to middle-income clients, this becomes a fire sale.

Here’s how it works. The premium subsidies that are factored in on the exchanges are based on the price of the second-lowest cost silver plan available in a region. When the prices went up on silver plans, the premium subsidies went up with them. For some people, their premium subsidy amount is now equal to or higher than the cost of a bronze plan.

That’s how more consumers now have access to health care that costs them nothing — or sometimes less than a couple bags of chips a month — in premiums.

Which Clients Can Benefit?

Of course, prices vary depending on location, age and income, but generally your younger clients who are eligible for premium subsidies should be able to find a great deal on the exchanges. Zero-premium bronze plans aren’t out of the question.

Here are a couple of real-world examples.

Mark is a 40-year-old single waiter in Memphis. He makes $30,000 a year. He’s eligible for a premium subsidy of $617 per month, so he can purchase a bronze plan worth $436.32 with his subsidy and pay nothing in premiums.
Joan and Jack live in Eugene, Ore., with their 10-year-old child. She’s a housewife, and he earns $50,000 a year as a mechanic. They get a premium subsidy of $660 a month and can purchase a bronze plan for as low as $9.01 for the entire family per month.

Bringing More People In

Marketing the open enrollment period to younger, healthier prospects and clients has never been easier. This group often stayed away from buying insurance because they think it’s too expensive, too difficult or they just don’t need it. The availability of low-cost plans can be a great incentive to get them insured.

Not only could zero- or low-premium bronze plans help your sales, but getting more younger, healthier people onto the exchanges can play a part in stabilizing the marketplace.

Your Help Is Still Invaluable

What about the consumers who have to pay full price for the metal plans? That 37 percent increase is going to hit hard. It may end up pricing them out of the marketplace and making them think that being uninsured is their only option. But it’s not. This is another niche where agents and brokers are really needed.

Remember that the 37 percent premium increase applies only to silver plans. In many areas, consumers now can purchase gold plans for equal or less than the price of a silver plan. And switching to a bronze plan could be an option if the higher deductible isn’t a problem. It might help to find an affordable plan off the exchange, such as a private plan, a short-term plan or a cost-share arrangement. There are options, and you can be there to help find them.

Trump has cut the enrollment period and slashed advertising dollars, but he may have inadvertently given thousands of low- and middle-income people an amazing health insurance opportunity.

With fewer navigators to help guide consumers and such a short time to promote enrollment, agents need to be on the front lines to get the word out and help as many people as they can. The open enrollment period is here. Are your clients ready for zero-premium bronze plans?

Michael Z. Stahl is an author, insurance expert, and an executive vice president at HealthMarkets. Michael may be contacted at [email protected].