What is Silver Loading in the Connect for Health Colorado ACA Exchange?

If you’re not eligible for premium subsidies, you may have noticed that silver-level plans are less expensive outside the exchange (directly from an insurer) than they are through the exchange.

This is due to “silver loading,” which is a process that Colorado insurers have been using since 2019. Here’s a very detailed explanation I wrote about all of this back in 2017. But here’s the short version:

The ACA requires insurers to provide more robust benefits on silver-level plans if the enrollee’s income isn’t more than 250% of the poverty level. This is known as cost-sharing reductions/subsidies, or CSR.
From 2014 through 2017, the federal government reimbursed insurers for the cost of providing CSR benefits to eligible enrollees.
In the fall of 2017, the Trump administration cut off that federal funding just before open enrollment was set to begin. But the ACA still required insurers to continue to provide the benefit.
States and insurers scrambled to figure out a solution. The one that nearly all of them (including Colorado) eventually settled on is called “silver loading.”
Silver-loading means that the insurance company calculates the cost of providing CSR, and then adds that cost to silver-plan premiums (but not to the premiums of plans at other metal levels). In most states, including Colorado, the cost to provide CSR benefits is only added to the premiums of silver plans sold in the exchange, but not to silver plans sold outside the exchange.
The result is disproportionately high on-exchange silver plan premiums. This is beneficial for most enrollees because premium subsidies are calculated based on the premium for the second-lowest-cost silver plan. Since that premium is higher than it would have been without silver-loading, premium subsidies are larger than they would otherwise be, even for those enrolled in Bronze or Gold plans.
But if you’re certain that you will NOT be eligible for premium subsidies and you want a silver-level plan, you might find that it’s less expensive to enroll in a plan outside the exchange.