Senate bill to end ‘silver loading’ in exchange plans

Modern Healthcare – Wednesday, June 11, 2025
By Michael McAuliff

The Senate Health, Education, Labor and Pensions Committee is out with its contributions to the “One Big Beautiful Bill,” which include provisions reviving cost-sharing reduction payments to health insurance exchange carriers.

The draft legislation, which the panel released late Tuesday, mirrors language in the House-passed version of the measure to extend tax cuts President Donald Trump enacted during his first term. The nonpartisan Congressional Budget Office estimates this aspect of the House bill would reduce gross Silver plan premiums by 12% but cause 300,000 people to lose health coverage.

This policy has its origins in Trump’s first stint in the White House. At his direction in 2017, the federal government halted reimbursements to health insurers whose low-income customers qualified for cost-sharing reductions that bring down out-of-pocket expenses such as deductibles and co-payments.

To prevent large, widespread premium hikes from insurers seeking to make up the lost revenue, state and federal regulators allowed companies to engage in what’s known as “silver loading” by focusing rate increases on the Silver-level plans enrollees must choose to receive cost-sharing subsidies. President Joe Biden’s administration maintained this strategy.

While undoing “silver loading” would restore the original intent of the Affordable Care Act of 2010, it would disrupt a market that adapted to Trump’s maneuver eight years ago in ways that benefited many exchange customers but increased federal spending.

Because premium tax credits are based on the cost of the second-most expensive Silver plan in every area, ending cost-sharing reduction payments and “silver loading” had the effect of boosting the value of premium assistance and making costs lower for eligible enrollees than if the cost-sharing payments continued to flow.

The CBO and analysts such as the nonpartisan health policy research institution KFF anticipate that health insurance companies would respond to the return of cost-sharing payments by lowering the prices for Silver plans.

“This legislation decreases health insurance premiums for patients by addressing silver loading by insurance companies,” the Republican-led HELP Committee said in a news release Tuesday.

But the broader consequences would be more complicated.

“Subsidized enrollees who pick a Silver-level plan may see no difference in their monthly out-of-pocket premium payments resulting from the funding of [cost-sharing reductions]. Meanwhile, enrollees who pick a Bronze- or Gold- level plan will likely pay more for their monthly premium,” KFF concludes in a report published June 2. “This is because Bronze and Gold gross premiums would be unaffected, while the total amount of the premium tax credit is smaller, resulting in people in those plans paying more than they would have with silver loading.”

The CBO expects enrollment to decline because enrollees would decide coverage is unaffordable. KFF predicts these would mainly be middle-class people.

A family of three making $67,000 a year would see average premiums rise $1,573 under this proposal, the centrist think tank Third Way estimates in a report published Wednesday.

The CBO projects the net effect of making cost-sharing payments but spending less on premium subsidies would reduce federal expenditures by $25.4 billion over 10 years.

“This outrageous proposal would drive up premiums for more than 10 million Americans and strip health coverage from an estimated 300,000,” a spokesperson for HELP Committee ranking member Bernie Sanders (I-Vt.) wrote in an email.

Sanders and committee Democrats also object that HELP Committee Chair Dr. Bill Cassidy (R-La.) scheduled no public hearings or legislative sessions to debate the bill, which is being fast-tracked through the Senate under “budget reconciliation” rules that prevent Democratic filibusters.

“Failure to hold hearings and a markup on this reconciliation bill before it is considered on the Senate floor would be an abdication of our duty to the American people,” Sanders and committee Democrats wrote in a letter sent to Cassidy on Wednesday.

The majority-GOP Congress is rushing to meet a self-imposed July 4 deadline to speed the One Big Beautiful Bill Act to Trump’s desk, but much work remains. The Senate Finance Committee, which is responsible for the tax provisions and most of the more than $1 trillion in healthcare cuts, has not released its portion of the legislation.

Meanwhile, the House is expected to consider technical changes to the bill Wednesday to fix errors that run afoul of Senate rules.

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