How Many Obamacare Subsidies Are Wrong?

Data discrepancies afflict around 2 million Obamacare enrollments:


The biggest concern is that some people may have received too high a subsidy, meaning they’d be asked to repay the excess or lose their coverage.


Obama administration officials said they believed most of the inconsistencies will be cleared up over the summer, but said they’d developed a system to “turn off” benefits for people who aren’t eligible. “The fact that a consumer has an inconsistency on their application does not mean there is a problem on their enrollment,” Julie Bataille, the Department of Health and Human Services’ spokeswoman said. “Most of the time what that means is that there is more up-to-date information that they need to provide to us.”


Philip Klein is alarmed:


2.1 million represents a lot of sign-ups. Even if a “vast majority” of instances are easily resolved, that could still leave hundreds of thousands of cases in which individuals received incorrect subsidy determinations. If individuals received extra subsidy money, it would mean that they would have to pay it back in the following tax year. A higher-than-expected tax liability could become a mess for lower-income Americans who budgeted for the year based on certain assumptions.


Cohn is less concerned:


The idea is to verify applicant information, in real-time. And mostly that’s what happened during open enrollment, at least once all of the consumer websites were working. But because the process is so complicated—and because people’s life circumstances sometimes change—the information that people supplied didn’t always match up with federal records. That was particularly true for income, since the data hub checked applications against (two-year-old) tax returns and (one-year-old) payroll stubs. Somebody who recently lost a job or got a new one, or went through a major life change like a divorce, or whose income simply varies a lot from year to year, could easily supply income information that was totally accurate but simultaneously at odds with the government’s latest data.


The Affordable Care Act anticipates situations like these and addresses them. Rather than hold up those applications, creating a huge backlog and potentially scaring away people seeking insurance, Section 1411 of the law allows applicants to complete the enrollment process even if the information they submit doesn’t match up properly. In such cases, people may “attest” to the accuracy of the information they provided. If the data mismatch is about citizenship or residency—or if it is about income and of greater value than 10 percent—these people receive official notices, requiring them to provide new information or show that the original, submitted information is correct.



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Published on June 05, 2014 11:37
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