HHS’ OIG Report Questions Accuracy of ACA Tax Credit Payments
CMS in 2014 lacked an effective method for ensuring tax credits created under the Affordable Care Act were accurately given to insurers on behalf of consumers who had paid their health coverage premiums, according to an HHS Office of Inspector General report released Wednesday, the Wall Street Journal reports.
Under the ACA, consumers who purchased health plans through the exchanges created under the law can choose to have the federal government distribute tax credit payments directly to insurers to help lower individuals' monthly premium costs. According to the Obama administration, about 85% of exchange enrollees received subsidies in 2015, with individuals' average monthly tax credits equaling about $270.
According to the Treasury Inspector General for Tax Administration, insurers in fiscal year 2014 were paid almost $11 billion in tax credits.
According to the report, CMS in 2014 relied on aggregated information from insurers to determine the amount of tax credits each company should be paid. As a result, the report determined "there is a risk that funds were authorized for payment" in the wrong amounts.
OIG noted that the administration this year is transitioning to a new system that could correct the issues noted in the report.
CMS officials noted that OIG did not find evidence that insurers received overpayments. CMS spokesperson Meaghan Smith said the agency "has already addressed or is addressing [OIG's] recommendations," adding, "Moreover, CMS is implementing a fully automated policy-based payment process beginning this month" (Armour, Wall Street Journal, 1/6).This is part of the California Healthline Daily Edition, a summary of health policy coverage from major news organizations. Sign up for an email subscription.