CMS Could Terminate Federal Exchange Coverage for 115K

On Monday, CMS announced that it could terminate health coverage purchased under the Affordable Care Act by 115,000 people effective Oct. 1 because the individuals have failed to validate their citizenship or immigration statuses, the New York Times reports (Pear, New York Times, 9/15).

Background

In July, HHS' Office of Inspector General released a report finding that the federal government and Covered California failed to properly verify eligibility for exchange enrollees, including by not always verifying U.S. citizenship

Last week, CMS sent letters to about 310,000 U.S. residents who enrolled in coverage through the federal insurance exchange warning that if they do no submit documents to verify their citizenship or immigration statuses by Sept. 5, they could lose the coverage they purchased through the federal health insurance exchange.

The move did not affect state-run exchanges. However, Covered California officials later said the state's insurance exchange would follow the federal government's example and require some enrollees to verify their lawful presence in the country in order to retain health insurance they obtained through the marketplace (California Healthline, 8/22).

As of Sept. 4, Covered California officials said about 98,000 California residents who purchased health insurance through Covered California had not yet verified their lawful presence in the U.S., even after being contacted by the health insurance exchange (California Healthline, 9/5).

CMS said it would contact those who reported incomes that are inconsistent with federal records (California Healthline, 8/13).

Coverage Terminations

CMS Principle Deputy Administrator Andy Slavitt said that the 115,000 individuals "will lose their coverage as of Sept. 30" because they did not submit necessary documents by Sept. 5, after repeatedly being contacted by the agency (New York Times, 9/15). CMS will contact insurers and tell them to terminate the coverage at the end of the month (Radnofsky, Wall Street Journal, 9/15).

The number includes those who enrolled in the 36 states that relied on the federal exchange for the ACA's first open enrollment period. Of the 115,000 individuals:

• 35,100 live in Florida;
• 19,600 live in Texas;
• 6,300 live in Georgia;
• 5,300 live in North Carolina;
• 5,200 live in Pennsylvania;
• 4,000 live in Illinois; and
• 2,400 live in New Jersey.

According to Slavitt, some individuals could have their coverage reinstated retroactively if they submit the necessary documents after the deadline (New York Times, 9/15). Individuals with immigration or citizenship issues might also qualify for special enrollment periods under the law, according to Reuters (Morgan, Reuters, 9/15). Slavitt said that those with terminated coverage can also apply to re-enroll at any point (Wall Street Journal, 9/15).

Altered Subsidies

In addition, CMS said it could suspend or alter subsidies to help purchase exchange coverage for about 363,000 individuals who have failed to verify their incomes for coverage they purchased under the ACA.

According to Slavitt, there were about 1.2 million households, representing 1.6 million U.S. residents, that had income "data-matching issues" as of May 30. Slavitt said the federal government has resolved cases for 467,000 of those households, while another 430,000 cases are "currently in the process of being resolved." However, Slavitt said, "There are still about 279,000 households with unresolved income-related data-matching issues that haven't sent in supporting information, representing 363,000 individuals."

According to CMS, the individuals still can submit corrected information up until Sept. 30 (New York Times, 9/15). If they do not send in the necessary data, CMS will adjust the subsidies to "reflect what we have in our records," Slavitt said.

The changes could cause individuals to lose all or some of their subsidies (Sun, Washington Post, 9/15). Further, some individuals might have to pay back some or all of the subsidies they have received. Meanwhile, some individuals could qualify for larger subsidies if their incomes are not as high as they had anticipated when applying for coverage (New York Times, 9/15).

CMS said it would begin setting letters to affected individuals on Sept. 15 (Washington Post, 9/15).

Reaction

National Immigration Law Center health policy analyst Jenny Rejeske said, "It is unduly harsh to terminate coverage while there are still technical problems with the federal system for verifying citizenship and immigration status," adding, "And there has not been adequate notice to people who speak languages other than English and Spanish."

Meanwhile, National Health Law Program attorney Mara Youdelman said her group "heard from lots of consumers who told us they sent in their documents multiple times or tried to upload them through HealthCare.gov" (New York Times, 9/15).