guidance aimed at helping consumers who struggled late last year to get insurance through the federal and state marketplaces may not be the panacea for those consumers that early reports made it out to be, insurance and policy experts warn.
The guidance, issued late Thursday, outlines conditions in which individuals who faced enrollment difficulties with marketplaces can receive coverage, tax credits and subsidies on a retroactive basis as long as they applied for coverage using the federal or state application form during the open enrollment period and did not enroll in any form of coverage.
Also, people who were unable to sign up because of technical problems may still get federal tax credits if they bought a plan outside of the insurance exchanges
But the devil will be in the details, such as what type of coverage consumers obtained and what proof they have that they tried to use a state or federal exchange that wasn't working properly at the time, experts say.
For those who bought insurance directly from an insurer, the first caveat in the new directive is that the plan must be a qualified one, said Brian Haile, senior vice president for Health Policy at Jackson Hewitt Tax Service.
A qualified health plan is one that has been certified as meeting all the coverage requirements outlined in the Patient Protection and Affordable Care Act
. If a consumer purchased a non-compliant plan, they won't be eligible to get a tax credit.
In theory, the people who benefit most from the guidance would be those who applied in time for coverage to be effective Jan. 1, but did not receive it. Oregon for instance, has 50,000 people who fall into this category.
The guidance dictates that as long as there was evidence the person attempted to get insured in time for a policy to start Jan. 1, they can get retroactive coverage, and tax credits whenever they are finally successfully enrolled.
However, it's unclear how a person is supposed to prove they attempted to get coverage. As written, the guidance could be claiming anything from a person visiting the broken site, to submitting a paper form, to registering and creating a profile fits the burden of effort necessary, said Michael Mahoney, senior vice president of consumer marketing at GoHealth, a private insurance exchange company.
There's another consideration for a consumer pushing for a retroactive Jan. 1 enrollment date, he warned.
“It's important to note that if you get your start date retroactively changed, you will be responsible for paying the difference in premiums,” Mahoney said.
Even assuming consumers can prove they tried to get coverage, receiving their tax credits and subsidies could be a drawn-out process.
“The complexities of reconciling eligibility status, coverage, claims costs and payment to providers and cost-sharing for consumers are tremendous,” said Stephanie Chrobak, a principal at Health Management Associates and former director of operations for Massachusetts Health Connector. “Settling consumers' eligibility and coverage status could take many months of hassle, especially for the consumer and for providers of care.”
On the payer
front, the guidance will result in “substantial administrative costs for insurers,” Haile warned. The document instructs them to re-process eligibility and enrollment files, bill the federal government for subsidies, re-adjudicate past medical claims, and refund enrollees premiums and cost-sharing that exceed subsidy amounts.
But “we didn't see any major cause for concern,” said Mary Beth Chambers, a spokeswoman for Blue Cross and Blue Shield of Kansas. “We recognize that implementing ACA is a fluid process and, as we have with changes in the past few months (we) will continue to work on behalf of the Kansans we serve by adapting to the changes as they come.”
Insurance exchanges had mixed reactions to the document. Maryland's marketplace said in a statement that it is “pleased that new options are becoming available to help individuals who have experienced problems.”
Massachusetts has more than 30,000 residents in a temporary coverage program until individual eligibility determinations can take place through the state marketplace.
“We're trying to figure out if this will affect them or not,” said Jason Lefferts, the exchanges spokesman.
The CMS did not perform an impact analysis for the guidance, a representative from the agency said. Follow Virgil Dickson on Twitter: @MHvdickson