The CMS is stepping up enforcement action against Medicaid consumers who received tax credits to purchase insurance through the Affordable Care Act marketplace—a move that could mean lost coverage for some.
The CMS first began to alert states relying on Healthcare.gov about the problem last September. Previously, consumers in this situation would receive a notice that they must terminate their marketplace coverage or else be on the hook repaying the credit.
Consumers are finding themselves being dually enrolled if they have experienced a life change, such as a drop in income that made them eligible for Medicaid after they had purchased marketplace coverage.
Similarly, consumers enrolled in marketplace coverage may have applied and been awarded Medicaid coverage while failing to terminate a marketplace plan.
To help find these people, the CMS is enlisting periodic data matching, which uses existing non-employer sponsored coverage data to check whether a consumer who is enrolled in Marketplace coverage with tax credits is also enrolled in Medicaid or Children's Health Insurance Program coverage.
Now the CMS is stepping up enforcement action by voiding the enrollee's tax credits if they don't end their marketplace coverage on their own after being warned, it said in a new notice to states.
There is a chance that this change in policy could lead to a loss in coverage for some as the agency acknowledges some people receiving the warnings may not actually be in Medicaid as its records indicate.
It's unclear how many people will be receiving the notices. A CMS spokeswoman would say only that it was a “small number” of people.
As a result of the new enforcement action, actions are being taken to mitigate the possibility of someone wrongly losing their tax credits, the spokeswoman said.
Consumers in these situation will now receive two notices after having been found dually enrolled in Marketplace coverage and Medicaid. If that person either doesn't void their marketplace coverage or attest they are not in Medicaid after the second notice, the CMS will step in and void the person's tax credits.
This extra step may not help avoid loss of coverage as many low income families tend to move often, so many addresses may be inaccurate, said Kip Piper, a Washington-area consultant and former senior official at the CMS.