Great News: Your Obamacare Subsidy Is Probably Too Big
The Washington Post has gotten a hold of some documents that the administration probably hoped would never see the light of day.
Apparently, more than a million people who are receiving subsidies for their Obamacare insurance policies are in for a surprise: the subsidies are either too large or too small.
The problem is that the income reported by more than a million consumers doesn't match what the IRS has on file. And the procedure to match income with subsidy can't be implemented because the back-end of the healthcare.gov website still hasn't been built.
The problem means that potentially hundreds of thousands of people are receiving bigger subsidies than they deserve. They are part of a large group of Americans who listed incomes on their insurance applications that differ significantly — either too low or too high — from those on file with the Internal Revenue Service, documents show.
The government has identified these discrepancies but is stuck at the moment. Under federal rules, consumers are notified if there is a problem with their application and asked to upload or mail in pay stubs or other proof of their income. Only a fraction have done so, according to the documents. And, even when they have, the federal computer system at the heart of the insurance marketplace cannot match this proof with the application because that capability has yet to be built, according to the three individuals.
So piles of unprocessed “proof” documents are sitting in a federal contractor’s Kentucky office, and the government continues to pay insurance subsidies that may be too generous or too meager. Administration officials do not yet know what proportion are overpayments or underpayments. Under current rules, people receiving unwarranted subsidies will be required to return the excess next year.
The inability to make certain the government is paying correct subsidies is a legacy of computer troubles that crippled last fall’s launch of HealthCare.gov and the initial months of the first sign-up period for insurance under the Affordable Care Act. Federal officials and contractors raced to correct most of the technical problems hindering consumers’ ability to choose a health plan. But behind the scenes, important aspects of the Web site remain defective — or simply unfinished.
White House officials recently have begun to focus on the magnitude of income discrepancies. Beyond their concerns regarding overpayments, members of the Obama administration are sensitive because they promised congressional Republicans during budget negotiations last year that a thorough income-verification system would be in place.
Under White House pressure, federal health officials and the contractor, Serco, are this weekend beginning to step up efforts at resolving a variety of inconsistencies that have appeared in applications, including income discrepancies. One White House official, speaking on the condition of anonymity about internal discussions, said that White House and federal health officials are “all on the same page that the issue needs to be resolved as soon as possible.”
In light of this information I call to your attention this statement from CMS that is full of lies from beginning to end:
Julie Bataille, communications director for the Centers for Medicare and Medicaid Services, the agency overseeing the federal insurance exchange, said: “The marketplace has successfully processed tens of millions of pieces of data — everything from Social Security numbers to tribal status to annual income. While most data matched up right away during the application process, we take seriously the cases that require more work and have a system in place to expeditiously resolve these data inconsistencies.”
Bataille also added that “an inconsistency does not mean there is a problem with a consumer’s enrollment” but that the consumer must send in additional documentation to verify whether their application information is accurate. “We’re working every day,” she said, “to make sure individuals and families get the tax credits they deserve and that no one is receiving a tax credit they shouldn’t.”
So, the website has processed a lot of information -- except the correct subsidy amount for more than a million people. And there will be nothing "expeditious" about resolving the inconsistencies. CMS won't even start addressing this problem until the summer.
Article printed from PJ Media: http://pjmedia.com/tatler
URL to article: http://pjmedia.com/blog/great-news-your-obamacare-subsidy-is-probably-too-big