Earlier this week, Health Affairs ran a lengthy blog I wrote about how Healthcare.gov incorrectly counts Social Security income for tax dependents who are not required to file taxes. Policy experts and enrollment assisters had suspected the system glitch existed for some time before CMS confirmed the error in early March. Thankfully, the problem is now fixed so no new applicants will get a wrong determination but we’re still waiting to hear more about what will be done to correct the problem for those who were affected.
So what was the problem?
In determining eligibility for federally-sponsored health coverage, an individual or family’s adjusted gross income is ‘modified’ by adding non-taxable Social Security income, tax-exempt interest, and foreign income received by all tax filers. For tax dependents, the rules are a bit different. Income received by tax dependents only counts toward the household’s total MAGI income if the tax dependent is required to file their own tax return. If you want to get into the policy weeds of MAGI, check out this blog or this report.
How did the error impact families?
Adding Social Security income inflates the total household income that is used as the basis for eligibility. As a result, some people have been denied Medicaid when they were eligible, and others are receiving less financial assistance to help pay premiums or lower cost-sharing in a marketplace plan. I give a couple of examples in the Health Affairs blog that illustrate the financial impact. More often than not, the error would be to an individual’s financial disadvantage but it could work to an adult’s advantage in a state that has not expanded Medicaid. But what is really concerning is that some people may have decided that they could not afford insurance and have remained uninsured.
How many people have been affected by this error?
It’s hard to know the exact number, but a back of the envelope calculation suggests it could be in the tens of thousands. Six percent of the non-elderly population receives some type of Social Security income. Of those, 7.4 percent are children. But the number affected depends on how long the glitch has existed. It is not clear if this was a problem when Healthcare.gov was launched or appeared later when other system changes were made.
What will CMS do to help those who have been impacted?
Fixing Healthcare.gov should be only the first step in rectifying this problem. Healthcare.gov could sweep its enrollment and eligibility records to proactively identify individuals and families affected by the error. It could automatically re-determine eligibility for these individuals and make sure they are enrolled in the right coverage source with the maximum financial assistance available to them. But that only takes care of the problem going forward. Other steps are needed to reimburse individuals and families for costs they should have never incurred, despite the fact that doing so will be complicated to figure out.
What can be done in the short-term to help consumers?
While we wait to learn more about what CMS plans to do to remedy the error, consumers and the enrollment assisters who have helped them access coverage should take action on their own. CMS has indicated that consumers have three options for initiating a review of the eligibility determination:
- Go to My Account in Healthcare.gov and request a “full Medicaid determination.”
- Submit an appeal to the FFM (but note appeals must be filed within 90 days of the eligibility determination).
- Apply directly at the state Medicaid or CHIP agency.
What steps should CMS take to avoid errors like this from occurring in the future?
Last summer in the June issue of Health Affairs, I wrote, “If Marketplaces were to set up a testing version of their ‘live’ information technology (IT) systems for policy and consumer groups, they could tap a cadre of experts to supplement their technical resources. Engaging external partners would expand troubleshooting capacity, provide independent corroboration of system performance, pinpoint ways to enhance the consumer experience, and ensure that each phase of system development is good to go.”
I know many policy experts, myself included, are more than willing to volunteer for this task. Such a collaboration should be part of systematic testing protocol that seeks to identify and root out all system glitches rather than address them piecemeal.
A special thanks to the Robert Wood Johnson Foundation for its support of our work on providing feedback to HHS and highlighting how ACA implementation is impacting consumers.