Abstract
The Affordable Care Act established two federally funded subsidies-cost-sharing reductions and premium tax credits-available in the health insurance Marketplaces. In 2018 federal payments to insurers for cost-sharing reductions were terminated. Insurers responded by increasing plan premiums to account for the loss of these payments. Premiums for silver plans were increased more than those for other metal tiers because cost-sharing reductions are available only in silver plans, while premium tax credits can be applied across different metal tiers. One consequence of greater premium increases for silver plans was the increased availability and selection of plans with zero premiums for consumers. We examined the magnitude of this issue using plan selections through the federal Marketplaces during the open enrollment periods before (2017) and after (2018) the termination of payments. We found that zero-premium plan availability increased by 18.3 percentage points, selection increased by 7.9 percentage points, and selection conditional on having a zero-premium plan available increased by 8.8 percentage points. Were federal cost-sharing reduction payments to be restored, a reduction in availability and selection of zero-premium plans would likely occur, and more consumers could lose access to the plans.
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