VOL. 129 | NO. 144 | Friday, July 25, 2014
Varying Health Premium Subsidies Worry Consumers
KELLI KENNEDY | Associated Press
MIAMI (AP) – Linda Close was grateful to learn she qualified for a sizable subsidy to help pay for her health insurance under the new federal law. But in the process of signing up for a plan, Close said her HealthCare.gov account showed several different subsidy amounts, varying as much as $180 per month.
Close, a South Florida retail worker in her 60's, said she got different amounts even though the personal information she entered remained the same. The Associated Press has reviewed Close's various subsidy amounts and dates to verify the information, but she asked that her financial information and medical history not be published for privacy reasons.
"I am the kind of person the Affordable Care Act was written for: older, with a pre-existing (condition) and my previous plan was being cancelled. I need it and I'm low income," said Close, who has spent more than six months appealing her case. "The government pledged to me that original tax credit amount. It's crazy."
Government officials say Close – and other consumers who have received different subsidy amounts – probably made some mistake entering personal details such as income, age and even ZIP codes. The Associated Press interviewed insurance agents, health counselors and attorneys around the country who said they received varying subsidy amounts for the same consumers. As consumers wait for a resolution, some have decided to go without health insurance because of the uncertainty while others who went ahead with policies purchased through the exchanges worry they are going to owe the government money next tax season.
These difficulties faced by Close and others are unfolding separately from the legal battle that flared this week when two federal appeals courts issued contradictory rulings on the subsidies in states that rely on the federal health exchange. The Obama administration says policyholders will keep getting financial aid as it sorts out the legal implications.
The government said consumers who received multiple subsidy estimates or disagree with their subsidy amount can appeal. The government hopes to resolve most of the appeals paperwork this summer. It's unclear how many people received or appealed varying subsidy amounts.
Still, Centers for Medicare and Medicaid Services spokesman Aaron Albright said consumers "should feel confident that they received an accurate determination based on the information they provided in their application."
Federal health officials ruled on Close's appeal last month, giving her yet another subsidy estimate, which was within a few dollars of the one she is currently receiving, her attorney said.
Subsidies are important to making premiums under the new health care law affordable. About 87 percent of the more than 8 million people who signed up for coverage under the law received subsidies, which are paid directly to the insurance company on behalf of individual consumers, according to data from federal health officials. Consumers pay the difference directly to the insurance company each month just as they do with private insurance.
Dallas insurance agent Jo Ann Charron said the different estimates her clients received varied as much as $100 a month.
"Some of them got more of a subsidy, some of them got less," she said.
Since consumers aren't required to use the entire amount, Charron said she encouraged her clients to accept at least $50 less than the highest subsidy quoted to give them a financial cushion in case the government ultimately decides that the lower amount applies.
The differing subsidy calculations are part of a mountain of data conflicts affecting at least 2 million people who signed up for coverage in the new health insurance exchanges. Most of the discrepancies involve important details about income, citizenship and immigration status – which affect eligibility and subsidies.
Some supporters of the law fear low-income consumers will owe the government money because their subsidy was incorrect. Federal health officials have repeatedly stated that the IRS will have the final say, regardless of what figures were generated on healthcare.gov. The IRS can deduct the amount from consumers' tax refund or tell consumers they owe the government money. Or, conversely, consumers could receive money back if they took too low of a subsidy.
The government says the varying subsidy amounts likely were generated several ways: As consumers struggled to navigate the glitch-plagued healthcare.gov website, they often had to start new applications and unknowingly might have entered slight differences in their income, ZIP code or number of dependents. In some cases, consumers completed an application and received a subsidy they thought was incorrect and then called the hotline or had a navigator or insurance agent fill out another application. The applications likely contained some small differences, which generated another subsidy figure.
Many consumers were required to submit additional paperwork to complete their applications, including citizenship or tax information, and that additional information also could have generated a different subsidy amount.
In Roanoke, Virginia, insurance agent Carol Taylor had seven clients who remain uninsured because of unresolved subsidy questions after federal officials asked them to submit additional documents to verify their income.
"They are just sitting there. They haven't picked (a plan) because they can't get a correct answer, and they'd rather wait until they get through the verification process to make sure they get the right amount," Taylor said.
Although the enrollment deadline has passed, federal officials can grant consumers special status that would allow them to pick a plan now.
About half of the two dozen consumers Taylor helped enroll in the marketplace had problems with eligibility results. She spent hours on hold with the federal government trying to resolve the issue for five clients and was told consumers should go with the lower subsidy amount to avoid having to repay any money later in case of an error.
Delaware insurance agent Nick Moriello's client was quoted an $87 subsidy from healthcare.gov and a roughly $30 subsidy from the federal government's hotline. In the meantime, his client isn't buying a plan.
"She said if I'm only going to be eligible for the $30 credit, it's not going to be affordable for me so I'll wait," he said.
Follow Kelli Kennedy on Twitter at www.twitter.com/kkennedyAP
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