Healthcare Business News
Marilyn Tavenner, CMS

Tavenner rips 'myths' surrounding ACA

By Jonathan Block
Posted: July 10, 2013 - 7:15 pm ET

After remaining largely silent following last week's Obama administration decision to delay for one year the healthcare reform law's employer mandate, CMS Administrator Marilyn Tavenner on Tuesday issued what she called a “reality check” in the form of a blog post titled “Myth vs. Fact: Health Insurance Marketplace on Track.”

“Unfortunately, there have been some mischaracterizations of these regulations and confusion about how the Marketplace will work when it opens later this year,” Tavenner wrote. “Let's do a reality check on some of the myths that have been circulating.”

Advertisement | View Media Kit


Last week, the IRS issued a final rule stating that state exchanges did not have to verify an applicant's income or whether their employer provided qualifying coverage to extend a federal premium subsidy to the applicant.

But Tavenner wrote that “the Marketplace will always check the income information submitted by individuals against electronic income data sources such as tax filings, Social Security and current wage information.”

She also responded to criticisms that there are no safeguards in 2014 to prevent people from fraudulently qualifying for tax credits. She noted that the reform law provides stiff penalties for false statements on applications. Tavenner added that the IRS will also recoup any overpayments when individuals file their federal income tax returns for 2014.

In addition, she said the IRS' final rule differs only modestly from the CMS' prior rule on conducting random samples to verify offers of qualifying employer-based coverage. The IRS' final rule, she said, differs only in that state-run exchanges can decide whether and how to conduct such verifications in the first year of operation, 2014.

But Nashville-based health benefits consultant Austin Madison says he doesn't believe the safeguards against people fraudulently qualifying for premium subsidies are strong enough in 2014 without the IRS verifying income. “The fact of the matter is that many individuals that may qualify (for a premium tax credit) from an income standpoint may not even file (a tax return) and therefore there may not be adequate information to determine income.” He added that it will be impossible for random checks to catch fraudulent activity.

Madison also contends there is a “serious flaw” in the inability to verify whether a person applying on an exchange is already eligible for employer-provided affordable health coverage, which would disqualify them from receiving subsidized coverage on the exchange. “Unless an employee's cost for health insurance through their work is free, they are going to feel that it is unaffordable. So, if the question is, 'Do you have access to affordable coverage through your place of employment?' the obvious answer from everyone is going to be no.”

He argues that implementation of the exchanges should be delayed until they are able to perform all the functions they are required by the law to perform.

Congressional Republicans also are questioning whether the employer mandate delay is legal, and are asking why the individual mandate part of the Patient Protection and Affordable Care Act shouldn't also be delayed. Those questions were discussed Wednesday at a House Ways and Means Health Subcommittee hearing.

Congressional Democrats, however, are coming to the reform law's defense. “The irony of objecting to the delay of a program you've been trying to stop is, no doubt, lost on this room,” Rep. Jim McDermott (D-Wash.), ranking member of the House Ways and Means Subcommittee, said at the hearing Tuesday morning.

Republicans are taking advantage of the announcement to cast doubt on the entire law. The Republican leaders of the House Energy and Commerce Committee Oversight and Investigations Subcommittee wrote to HHS Secretary Kathleen Sebelius about the decision to abandon the income verification process for exchanges. They are demanding documents “to understand the status of PPACA implementation, and how eligibility for exchanges will be verified.”

Last week, many of the same members sent letters to Sebelius and Treasury Secretary Jack Lew following the employer mandate delay. Lew was also asked to testify at a July 18 Oversight and Investigations Subcommittee hearing.

Follow Jonathan Block on Twitter: @MHjblock

What do you think?

Share your opinion. Send a letter to the Editor or Post a comment below.

Post a comment

Loading Comments Loading comments...



Switch to the new Modern Healthcare Daily News app

For the best experience of on your iPad, switch to the new Modern Healthcare app — it's optimized for your device but there is no need to download.