The “Big, Beautiful Bill” is now in the U.S. Senate for review and approval. Today, we want to focus on the impact of two specific changes that impact what ACA agents will do with clients: cost share reductions (CSRs) and the “silver-loading” effect of Premium Tax Credits.
Another resource on these two subjects KFF. KFF gives a detailed history of how we arrived at the current situation, and how the bill is addressing the situation with its changes.
A Quick Summary of Where We Are
The current ACA Marketplace has ACA carriers offsetting the costs of the CSRs low-income clients receive on their Marketplace plans by increasing monthly premiums on Silver plans where most of these clients enroll. The result is a higher benchmark premium that the federal government uses to determine the amounts of Premium Tax Credits low-income ACA clients may access.
So, the federal government is spending more money on Premium Tax Credits due to the silver-loading phenomenon, and this amount is more than the government would spend if it paid the carriers for the CSRs in the first place.
The Changes in The Big, Beautiful Bill to Address This Issue
The bill reinstitutes government payments for CSRs to what they paid for CSRs in 2017. There’s no prohibition against raising monthly premiums for Silver plans, but the regulation in place removes any need for the higher premiums to stay.
The expectation is that the monthly premiums for Silver plans should decrease, making the costs for the federal government on Premium Tax Credits also decrease through lower premium benchmarks. The government gets cost savings to apply to the deficit.
In the real world, we know low-to-middle-income clients also use Premium Tax Credits to enroll in Bronze and even Gold ACA Marketplace plans, too. These plans’ premiums aren’t affected by the bill’s change, so the impact on these clients will be a lower tax credit to cover the Bronze or Gold monthly premium.
What We See as an Opportunity for Agents
- CSR payments to carriers should lower monthly premiums for ACA Silver plans in 2026, perhaps a double-digit decrease. Current regulation makes it extremely difficult for carriers to keep these Silver premiums where they are unless costs justify the amount.
- Gold and Bronze low-and middle-income clients are in jeopardy to disenroll from these plans with the higher net monthly premium resulting from the bill’s change.
- Agents should be ready to present Silver plans now with a projected net lower monthly premium with the lower premium from eliminating silver-loading and the premium tax credit offering even better value on this base lower amount.
At this time, Agility cannot confirm if these provisions will continue in the bill being approved by the U.S. Senate or in the final bill passed by both the U.S. House and U.S. Senate. We will keep you informed on the latest news about this bill on these pages.
Sebastian Alcantara, our ACA product specialist, is here to help you with any questions about these changes and the opportunities they present to agents. Sebastian can also refer you to our Medicare and Supplement product specialists to answer any questions you have specifically in these product areas.
Contact Agility Producer Support at (866) 590-9771 or email support@enrollinsurance.com for answers to any insurance questions. Agility can also add you to our free weekly email list for tips and vital information!
