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This is an update concerning the new "monthly Special Enrollment Period" -- effectively, year-round enrollment - -that CMS has implemented on HealthCare.gov for applicants with incomes below 150% FPL (currently $19,140 for an individual, $32,580 for a family of four).*
In a prior post about the monthly SEP, I emphasized that the vast majority (88%) of enrollees with incomes below the 150% FPL threshold are in states that have refused to enact the ACA Medicaid expansion, and that one effect may be to reduce the "coverage gap" in those states -- that is, the lack of subsidized coverage available to adults with incomes below 100% FPL, the minimum threshold for marketplace subsidy eligibility. During the pandemic, marketplace enrollment has increased by leaps and bounds in nonexpansion states -- it's up 45% in two years -- and half the enrolment in those states is at incomes below 150% FPL. Noting that subsidy eligibility is based on an applicant's estimate of future income, and that income is notoriously difficult to predict for low earners, I outlined a regulatory question posed by the rule establishing the monthly SEP:
The rule for the new SEP stipulates that while an applicant can obtain coverage by attesting income without documentation, "CMS will continue to require consumers whose projected annual household income cannot be verified using a trusted electronic data source to submit documentation to confirm their annual income."
That raises a regulatory question. In May 2021, CMS announced that in accordance with a court order, it would void a Trump administration rule requiring documentation of income estimated above 100% FPL if the "trusted data sources" tapped by the exchange indicated an income below that threshold. That is, CMS will no longer condition coverage on documentation that income is above 100% FPL. CMS can reduce or end premium subsidies if an attested income appears to be below the income indicated by those sources and documentation does not demonstrate otherwise.
The new SEP rule as cited above raises two questions. First, if the applicant attests to an income over 100% FPL and a "trusted electronic data source" indicates a lower income, will documentation be required on those grounds? Then, if the documentation -- say, two pay stubs -- indicate an income below 100% FPL, will the exchange deny coverage? The May 2021 rule says no. I am seeking clarification of this point from CMS and will update when I have a response.
CMS did respond to the query - -and the response raises a new question. My emphasis below:
Consumers aren’t eligible for Marketplace financial assistance if their household income is under 100% FPL unless they have been denied Medicaid coverage based on their immigration status. All consumers applying for coverage with financial help are asked to submit income documents if the household income entered on their application is more than 50% or $12,000 different from what is reported by our trusted data sources. Similarly, all consumers who submit documentation to resolve an annual household income data matching issue (DMI) will have their issue resolved if their documented household income is within 50% or $12,000 (whichever amount is greater) over their attested household income.
As the second highlight above indicates, income verification in marketplace applications is generally geared toward underestimates of income, which increase Advance Premium Tax Credits (premium subsidies). In 2019, the Trump administration mandated income checks for enrollees who entered an income above 100% FPL if the "trusted data sources" tapped by the exchange indicated an income below that eligibility threshold.** That rule was challenged in court, and vacated last March by a decision in City of Columbus, et al. v. Cochran, No. 18-2364, 2021 WL 825973 (D. Md. Mar. 4, 2021). As noted above, CMS complied by rescinding the Trump rule in May. That is, income documentation should not be required if "trusted data sources" indicate an income below (even 50% below) the 100% FPL eligibility threshold. (See this post for key wording in the Columbus decision and the May 2021 rule.)
Sub-regulatory guidance from CMS, published in advance of Open Enrollment for 2022 supports that premise less ambiguously than the CMS response above. It indicates that documentation will only be sought, or eligibility challenged, if the attested income is lower (by a generous margin) than what "trusted sources" indicate:
Annual household income data matching issues are currently created whenever the annual household income amount an applicant attested to is less than the household income amount information received from trusted data sources by more than 25% or by $6,000 (whichever is greater), or if no household income data is available from those sources. The HHS Notice of Benefit and Payment Parameters for 2017 granted authority to Marketplaces, subject to HHS approval, to set a reasonable threshold for the generation of annual household income data matching issues that would require additional verification. The threshold cannot be less than 10% and can include a dollar threshold.
At the current threshold, annual household income data matching issues negatively impact vulnerable consumers’ ability to maintain coverage. HHS has determined that it is a reasonable threshold to generate an annual income data matching issue for a consumer if they attest to having household income that is lower than the amount information from our trusted data sources by more than 50% or $12,000 (whichever is greater); a data matching issue continues to also be generated if no data is available from our trusted data sources. This threshold change, which we expect will simplify the process while maintaining program integrity, will be in place in the FFMs and SBM-FPs prior to the start of the annual individual market open enrollment period for plan year 2022.
So: there is a data matching issue if the applicant's attested income is egregiously low, but apparently not if it's high. Two more points to note. First, a variance of 50% or $12,000 is a generous standard. If a solo applicant indicates an income just over 100% FPL, say $13,000, it could not fail unless actual income indicated by trusted sources was below $1,000. (In larger households, an estimate could fall out of that broad range.) Second, income documentation is always required "if no data is available from our trusted data sources" -- e.g., if the applicant has not filed a tax return. But the documentation that an applicant provides on request should resolve the issue if the attested income is not 50% or $12,000 below what the data sources show. An income estimate that's higher than what the documentation indicates should not result in loss of subsidy. That's what the court ordered in Columbus, and that's what CMS stated in its May 5 rule.
A CMS guide to income estimation for consumers dated Nov. 2021 also indicates that if "trusted data sources" do have some record of the applicant's income, documentation will only be required if the income estimate is lower than what trusted data sources indicate:
The Marketplace will ask you to submit documents to confirm your annual household income if one of these occurs:
- The Marketplace can’t find a record of your income with its data sources.
- The expected income you listed on your application doesn’t match the amount shown in Marketplace data sources. You’ll need to send more information about your income if it’s lower than the amount shown in these data sources by more than 50% or $12,000. For example, if you estimate an annual household income of $15,000 for the year you want coverage, and Marketplace data sources report an annual income of $28,000 for your household, you may need to send additional confirmation to support your estimate of $15,000.
The expected income you listed on your application doesn’t match the amount shown in Marketplace data sources. You’ll need to send more information about your income if it’s lower than the amount shown in these data sources by more than 50% or $12,000. For example, if you estimate an annual household income of $15,000 for the year you want coverage, and Marketplace data sources report an annual income of $28,000 for your household, you may need to send additional confirmation to support your estimate of $15,000.
The whole orientation of this guide -- expressed in various examples of potential problems -- is pointed at potential underestimates of income, not overestimates. Underestimates lead to more Advanced Premium Tax Credits than the enrollee is entitled to, and the excess must be paid back at tax time. But if an enrollee overestimates income, and income ultimately turns out to be below 100% FPL, there is no clawback. The guide acknowledges the elasticity of annual income estimates, and states, "If you can’t get the documents you need, you can send the Marketplace a letter explaining why your annual household income is different from the information in our data sources."
Income estimates provided on the ACA marketplace application are made under penalty of perjury -- they must be good faith estimates. But that really is the only check on income estimates that may be optimistic. At the same time, the income documentation requirements that many low income enrollees are subject to if they don't file taxes and otherwise don't show up in other "trusted data sources" (e.g., Equifax) can be a barrier to coverage, despite the generous range and one-way direction of the data matching.
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* At present, benchmark silver coverage is free up to that income threshold, and the monthly SEP will be available only as long as it remains free -- that is, only through 2022 unless Congress extends the premium subsidy increases enacted temporarily in the American Rescue Plan.
** The Trump rule specifically noted that prior to its implementation, "Generally, if income data from our electronic data sources indicate a tax filer’s attested projected annual income is more than the income amount represented by income data returned by the IRS and the SSA and current income data sources, § 155.320(c)(3)(iii) requires the Exchange to accept the attestation without further verification" (see pdf pg. 56 here). With the Trump rule rescinded, 155.320(c)(3)(iii) is once again in effect. As amended by the rescission (pdf pg. 150 of the May 5 rule) the relevant part reads:
(A) Except as specified in paragraph (c)(3)(iii)(B) and (C) of this section, if an applicant's attestation, in accordance with paragraph (c)(3)(ii)(B) of this section, indicates that a tax filer's annual household income has increased or is reasonably expected to increase from the data described in paragraph (c)(3)(ii)(A) of this section for the benefit year for which the applicant(s) in the tax filer's family are requesting coverage and the Exchange has not verified the applicant's MAGI-based income through the process specified in paragraph (c)(2)(ii) of this section to be within the applicable Medicaid or CHIP MAGI-based income standard, the Exchange must accept the applicant's attestation regarding a tax filer's annual household income without further verification.
The exceptions pertain to cases where the data sources indicate an income higher than that attested.
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Thanks for the information in the post, which shows not only that you have the intellectual energy and capacity to handle the details, but that our health insurance system is so, so complex and difficult to use compared to especially Canada and the U.K.!
ReplyDeleteI have to jump on, though:
"Some 20 states (plus D.C.) that have expanded Medicaid also impose Medicaid Estate Recovery on Medicaid enrollees over age 55 -- that is, the state can reclaim the cost of Medicaid premiums from the enrollee's estate after her death and the death of her spouse."
as I think it understates the seriousness of the issue.
Specifically, you wrote,
"the state can reclaim the cost of MEDICAID PREMIUMS from the enrollee's estate after her death and the death of her spouse."
But the issue that makes the recovery so bad is that, as far as I can tell, what can be recovered is as much as ALL MEDICAL BILLS for the services provided for the person. (What you wrote assumes that a capitation will be recovered, and in certain states and cases that will probably happen, but it looks to me like it can also be all medical bills paid for the person. So it can be $800,000 if the person happened to have $800,000 in medical expenses.
(This is why I constantly write that the issue causes people to possibly have no insurance at all -- just a loan for medical expenses. A capitation would be effectively "a loan for premiums for insurance", but being responsible for all medical expenses paid out is "a loan for whatever medical expenses happen to occur", and there is no insurance at all in that case!)
Though perhaps some states have explicit written policies that they will always recover a capitation (in the case of expanded Medicaid). I have not seen that written for any expanded-Medicaid recovering state so far, and what I have seen and been told suggests it can be all medical expenses actually paid.
For example:
Case (1): Massachusetts, my own state. The estate recovery policy as here, https://www.mass.gov/info-details/massachusetts-medicaid-estate-recovery#about-estate-recovery- , specifies
"MassHealth [which includes Medicaid and expanded Medicaid in MA] may recover the total cost of care it paid for members after they turned 55, MassHealth may recover the total cost of care it paid for members after they turned 55,"
Further, when I was briefly had MassHealth (based on the state's estimate of my income), in negotiating the system, I was told, though the state used private companies to negotiate networks and prices for the MassHealth, the bills in those networks were paid directly by the state--not as a capitation.
Case (2) Minnesota, which actually doesn't currently estate recover expanded Medicaid (due to activism in the state--they did recovery post the start of the main ACA provisions in 2014, but stopped in about 2016). However, perhaps anticipating reversing the policy, the Minnesota ACA application says it may recover, and has people sign:
"If anyone on this application is eligible for Medical Assistance [Medicaid or expanded Medicaid', I have read and understand that the state may claim repayment for the cost of medical care, or the cost of the premiums paid for care, from my estate or my spouse’s estate."
It very explicitly gives the option of recovering all medical bills paid out.
(This is on adobe p. 21 here: https://edocs.dhs.state.mn.us/lfserver/Public/DHS-6696-ENG )
A minor quibble: It's incomes AT or below 150% FPL.
ReplyDeletePerfect accuracy on that front is one of those persistent phrasing annoyances, like "50 states plus D.C." I usually write "up to 150% FPL."
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