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Filling out an application for subsidized health insurance in the ACA marketplace can be straightforward — or not so straightforward. If the exchange’s “trusted sources” of information do not readily identify you, uploading proof of identity nd getting it accepted can be a…process (especially in a family with mixed immigration status). If you are self-employed and your income is not obviously reflected in regular monthly payments, documenting your claimed income and having the documentation accepted can also be a multi-stage process.
That said, once your documentation is accepted and your monthly subsidy is assessed, you are good to go, right?
Not always. Not in New Jersey, anyway, where the insurer can come after you for additional documentation — and potentially reduce your coverage to a shadow.
Specifically, New Jersey’s Department of Banking and Insurance (NJ DOBI) allows or indeed requires insurers in its Individual Health Coverage (IHC) program to presume that enrollees who are over age 65 are eligible for Medicare — unless the enrollee provides proof positive otherwise. AmeriHealth, the insurer with the largest market share in enrollments via GetCoveredNJ, the state ACA exchange, requires such enrollees to obtain a letter from the Social Security Administration stating that they are ineligible, and why. Otherwise, the insurer pays their claims only as a secondary payer, presuming that Medicare will pay the bulk of each claim.
That leaves the enrollee on the hook for the bulk of every medical bill she incurs, rendering the insurance policy’s statutory out-of-pocket limit essentially void.
As of the end of the New Jersey ACA marketplace’s Open Enrollment Period for 2023, 8,929 enrollees in health plans obtained through GetCoveredNJ were over age 65 (as were 287,715 ACA marketplace enrollees nationally). Most of them are probably legally present immigrants who lack the 40 quarters (10 years) of tax-paying work required to obtain free Part A Medicare (those who are ineligible for free Part A coverage are eligible for subsidized plans in the ACA marketplace if their income qualifies them). The onus is now on all New Jersey marketplace enrollees over age 65 to prove that they are ineligible for Medicare. That entails applying to the Social Security Administration and getting a rejection letter, which can take up to 60 days, according to the SSA help line. Obtaining proof of ineligibility is also…a process.
The rule allowing this presumption of Medicare eligibility and placing the burden of proof of ineligibility on the enrollee was apparently added to New Jersey’s regulations for the individual market this year.* The Proposed Amendments to the NJ's Standard Health Benefit Plans in the individual market, published last fall, state:
The Board proposes to remove Medicare from the scope of the Coordination of Benefits Provision and add a provision addressing the effect of Medicare on individual coverage. This new provision clarifies the secondary status of individual benefits when a person is entitled to Medicare as well as addresses the obligation of the consumer to provide information regarding Medicare eligibility. The Benefits from Other Plans provision cross references the newly added provision (p. 6).
The provision appears in the standard individual policy for NJ's individual market for 2023, published by NJ DOBI:
The Covered Person must respond to Our [the insurer’s] inquiries regarding whether they are Eligible for Medicare or Entitled to Medicare. When a Covered Person turns 65 We will assume the Covered Person is Eligible for Medicare and pay secondary benefits as set forth in this section unless the Covered Person provides written documentation that proves the Covered Person is not Eligible for Medicare. If Our records show that the Covered Person is Entitled to Medicare due to disability or ESRD We pay secondary benefits as set forth in this section unless the Covered Person provides written documentation that proves they are not Entitled** to Medicare and thus Our records are incorrect ( (p. 126).
As to the secondary benefits:
The benefit payable under this Policy will equal the applicable cost sharing under Medicare Parts A and B for the services and supplies received. For example, if Medicare Part B would have paid 80% of the Medicare allowed charge, the benefit payable under this Policy would be the cost sharing of 20% of the Medicare allowed charge. This Policy will not pay benefits that would have been payable by Medicare Parts A or B if the person had enrolled for Medicare Parts A and B (pp. 125-126).
These provisions appear to be illegal. I queried the federal Center for Medicare and Medicaid Services (CMS), because it seemed to me that if an ACA exchange finds an applicant eligible for premium subsidies, that person must have been determined ineligible for Medicare — e.g., by an immigration document showing that the person could not have obtained the required work history for full Medicare eligibility. A spokesperson for CMS pretty much confirmed that, via email (my emphasis below):
In May 2023, CMS issued an FAQ clarifying the benefit coordination between individual health insurance coverage and Medicare. The FAQ clarifies that pursuant to the essential health benefits and actuarial value requirements under the Affordable Care Act, a health insurance issuer offering non-grandfathered [ACA compliant] individual health insurance coverage may not change the plan payment level or refuse to pay for otherwise covered services on the basis that an individual is eligible for Medicare but not actually enrolled in Medicare. The FAQ is available at https://www.cms.gov/files/document/benefit-coordination-and-medicare-eligibility.pdf.
CMS has been in contact with the New Jersey Department of Banking and Insurance (NJDOBI) regarding this issue. We recommend contacting NJDOBI for further information.
Here is the relevant CMS guidance at the link provided above, dated May 24, 2023:
Q: An individual is enrolled in non-grandfathered individual health insurance coverage and is eligible for Medicare but isn’t enrolled in Medicare. May the issuer change the payment level for or refuse to pay for covered services for which Medicare would have paid had the person been enrolled in Medicare?
No. In the absence of enrollment in other primary coverage (such as Medicare), an issuer offering non-grandfathered (non-grandmothered) individual health insurance coverage cannot take that other coverage into account when paying for covered services. Pursuant to the EHB and AV requirements under the Affordable Care Act,[3] an issuer offering non-grandfathered individual health insurance coverage may not limit or exclude coverage based on the theoretical possibility of an individual’s enrollment in other coverage. [4] Additionally, modifying a benefit design based on an individual’s eligibility for Medicare could be considered as violating federal non-discrimination prohibitions.[5]
A footnote adds a germane qualifier (my emphasis):
4 This is true regardless of whether an individual is (or is presumed) eligible for Medicare on the basis of age, disability, or end-stage renal disease but not actually enrolled in Medicare.
NJ DOBI has authorized insurers in its individual market to do what is explicitly prohibited here. In fact they are compelled by contract to do it.
For an enrollee over age 65, the lowest-cost silver plan sold on GetCoveredNJ commands a premium in excess of $900 per month, paid by some combination of the federal government, New Jersey (which provides supplemental state subsidies to most enrollees), and the enrollee. Yet if that enrollee does not provide a letter from the SSA proving ineligibility for Medicare, the standard contract stipulates that the insurer will pay only 20% of the Medicare-allowed charge for each bill, leaving providers to pursue the individual receiving care for the balance, if they are so inclined. I have viewed current AmeriHealth bills, sent to a person over age 65 who is not eligible for Medicare, in which every charge, each for hundreds of dollars, is ascribed a code that signifies, according to the Explanation of Remark Codes:
You are eligible for Medicare as the Primary payer, but have not enrolled. The amounts payable under Medicare, as the primary payer, are excluded and IBC [Independent Blue Cross, AmeriHealth’s parent] will pay as the secondary payer. The provider may bill you for the excluded amounts (my emphasis).
Those provider bills can easily run into the thousands or tens of thousands of dollars, unlimited by the insurance policy’s putative annual out-of-pocket maximum.
I have contacted NJ DOBI four times about the provision enabling this billing behavior and have received no response. My questions:
Is DOBI aware of an apparent contradiction between the presumption of Medicare eligibility provided in the standard IHC contract and CMS guidance? In DOBI's view, is there in fact a contradiction?
Is the language cited above a policy change initiated in the 2023 plan year?
What is the rationale for allowing or requiring the presumption of Medicare eligibility for over-65 IHC enrollees?
Is it possible for any enrollee who enrolled via GetCoveredNJ who is receiving APTC and/or NJ Plan Savings to be eligible for Medicare? Does the GetCoveredNJ application not preclude that?
Does DOBI have any data as to how many over-65 ACA marketplace enrollees in the state have proved eligible for Medicare, in 2023 or any other time period?
What percentage of over-65 marketplace enrollees in the state (there were 8,929 as of the end of the 2023 Open Enrollment Period, per CMS’s state-level Public Use Files) are legally present noncitizens?
How many current NJ marketplace enrollees are currently presumed by insurers to be eligible for Medicare? That is, for how many current enrollees is Medicare the presumed primary insurer as of now?
If an insurer is receiving the full marketplace premium for an enrollee (via various payers) can it in fact legally serve as a secondary insurer?
Is DOBI concerned about the administrative burden for legally present noncitizens, determined eligible for APTC by GetCoveredNJ, having provided required immigration status documentation, being required post-enrollment to obtain proof of Medicare ineligibility from SSA?
If DOBI will not answer me, perhaps they’ll answer CMS.
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* An AmeriHealth employee told me that the requirement for enrollees to prove their ineligibility for Medicare to the insurer is a new regulation, effective in April 2023. While NJ DOBI has not confirmed this to me — or responded to any of my repeated inquiries about the requirement — the proposed rule cited above indicates that the AmeriHealth employee’s account is accurate. The requirement is not part of the most recent prior standard contract published by DOBI, effective 1/1/2020.
** In government nomenclature, “entitled” to Medicare means enrolled. A person rendered eligible for Medicare by end-stage renal disease can in fact opt not to enroll and still be eligible for subsidized marketplace coverage. The policy terms here are thus requiring the ESRD-eligible marketplace enrollee to document that he is not enrolled in Medicare.
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