The Impact of Silver Loading in ACA Health Insurance Marketplaces

In 2017, the federal government ended payments for cost-sharing reduction (CSR) subsidies for the Health Insurance Marketplaces created by the Affordable Care Act. Rather than uniformly increase Marketplace plans’ premiums to offset the loss of these payments, over 40 states responded by silver loading—only increasing the premiums of silver plans to which CSR subsidies apply and premium tax credits are tied. Silver loading was intended to increase the affordability of Marketplace coverage by increasing premium tax credits and thereby enrollment, though the literature lacks causal estimates. Furthermore, Congress is considering reinstating CSR subsidy funding, effectively undoing silver loading. We use panel data on 2015-2021 Marketplace health plan premiums and enrollment in 12 states from the Centers for Medicare and Medicaid Services to estimate silver loading’s effects using contiguous county-pair models. We find that silver loading functioned as intended, lowering the cost of Marketplace coverage and increasing enrollment by 8-14% among subsidized Marketplace enrollees with incomes between 250% and 400% of the poverty level. We project that Congress ending silver loading would decrease Marketplace enrollment by at least 330,000 enrollees in 2027.