Affordable Care Act

Consumers asked to verify income, other information — or risk losing government subsidies for health insurance

 
 
Luis Martinez, 51, of Hialeah, who bought health insurance in April for the first time in more than a decade, says the process of verifying his income and citizenship has taken much longer than he expected. Luis looks at the paper work he has filed, Friday, July 25, 2014.
Luis Martinez, 51, of Hialeah, who bought health insurance in April for the first time in more than a decade, says the process of verifying his income and citizenship has taken much longer than he expected. Luis looks at the paper work he has filed, Friday, July 25, 2014.
Peter Andrew Bosch / Miami Herald Staff

More information

To determine a consumer’s eligibility for a subsidized health plan under the Affordable Care Act, government officials verify the following information:

Social Security number, citizenship or immigration status, incarceration status, annual income, household size, Medicaid eligibility, availability of employer-sponsored coverage, and membership in a federally-recognized tribe.


dchang@MiamiHerald.com

Luis Martinez of Hialeah survived two heart attacks during the more than 10 years that he went without health insurance.

So he was relieved to finally find coverage on the Affordable Care Act’s insurance exchange in March, two weeks before the enrollment deadline.

But four months after he and his wife signed up for a subsidized, bronze-level health plan with Coventry, Martinez, 51, said he feels as though he has fallen into a black hole of government bureaucracy while trying to prove his income and his wife’s citizenship in order to keep their coverage, part of a national effort to verify policyholders’ eligibility.

Martinez, who has stents implanted in his coronary arteries, said he has tried repeatedly for more than a month to comply with the government’s requests for additional documentation to resolve inconsistencies in his personal information — or risk losing his $457 monthly subsidy, and health insurance for him and his wife, Rocio Balbin, 46.

So far, officials with the U.S. Department of Health and Human Services are not satisfied with his response.

“I am against time,” said Martinez, a computer systems administrator who is studying at night to earn a bachelor’s degree in electrical engineering. “I have a dream, and I want to finish my career before I die. This is stressing me out.”

HHS officials declined to comment on Martinez’s case, but the agency is contacting hundreds of thousands of people with subsidized health plans bought under the ACA to verify their eligibility, particularly income and citizenship status, months after they first applied for and received financial aid to help them pay premiums and out-of-pocket costs for their coverage.

About eight million people signed up for a health plan through the ACA exchanges. According to the Kaiser Family Foundation, 85 percent of them were eligible for financial aid, and the government is expected to deliver about $10 billion in subsidies during the first year.

Healthcare analysts say some consumers will end up paying higher monthly premiums as a result of the verification process, while others may have to repay some or all of their subsidies if they are found to be ineligible.

But for some, like Martinez, the verification process has become a maze of red tape.

Martinez has receipts showing that he mailed at least five identical packages — containing, he said, copies of his U.S. passport, his wife’s residency card, their 2013 income tax statement and his Florida driver license — by certified mail to the HHS-designated address in London, Kentucky.

Last week — more than a month after Martinez says he sent his first packet — he received a letter from the government stating that his information had been received, but that more documentation was necessary to establish Balbin’s immigration status. She was born in Colombia, and Martinez in Cuba.

“I just don’t know what else to do,” Martinez said.

Martinez said he bought his health plan with the help of a counselor at a kiosk in the Westland Mall in Hialeah. He and Balbin pay $5 a month for their coverage, after qualifying for a $457 monthly subsidy that reduces their premiums.

About two weeks after selecting the plan, Martinez received the first of several letters from HHS requesting his tax statement and other documents to verify his income, and Balbin’s proof of citizenship or immigration status.

The March 22 letter gave Martinez until June 20 to submit his documents, and until June 25 for Balbin to establish her immigration status.

He tried to upload the documents on healthcare.gov, the federally run online exchange used by states including Florida, but he kept getting a system error. Finally, he resorted to sending copies by U.S. mail.

Then he put the issue out of his mind.

His insurance, meanwhile, came in handy. He ended up in the emergency room at Kendall Regional Medical Center in June when he began to feel chest pain. He followed up with his primary care physician, who ran multiple tests and suspects a vein near his heart has expanded and “could explode,” Martinez said.

“They’re trying to find out where’s the vein,” he said, “where’s the problem in the heart that has developed.”

At about the same time, he received another letter from HHS requesting that he submit additional documentation.

Martinez said he sent another package, by priority mail, on June 16. He has a U.S. Postal Service receipt showing the package was delivered to London, Kentucky, and signed for on June 18.

But as of early July, he said, HHS had yet to process his documents.

Frustrated, he sent four more identical packages by priority mail on July 12 — all to the same address in Kentucky, according to his receipts.

“All I want is for my papers to get to the right place,” he said.

Martinez said he is concerned that he may lose his insurance coverage, or possibly be hit with the entire bill for his care at Kendall Regional in June. He said Coventry has warned him that his policy is in danger of being canceled if he does not comply with the government’s requests.

“They told me there’s nothing they can do,” he said, “that if the marketplace tells them I’m canceled, then they’re going to cancel me.

“If something happens,” he said, “I could be stuck with a bill between $7,000 and $12,000.”

HHS officials say that is not likely to happen yet. Under the ACA, most consumers with inconsistencies are given 90 days to reconcile their information with supporting documents — and the law allows HHS Secretary Sylvia Mathews Burwell to extend that period, which she has done for all consumers.

One reason for the extension may be the considerable backlog of cases. According to HHS, at the end of May about 1.2 million consumers had inconsistencies in their income information. About 461,000 consumers needed to verify citizenship, and about 505,000 were asked to prove their immigration status.

As of mid-July, HHS had processed about 650,000 cases.

Tasha Bradley, an HHS spokeswoman, said the department is working to verify consumers’ information “to make sure individuals and families get the tax credits and coverage they deserve and that no one receives a benefit they shouldn’t.”

But there is evidence that the government has been overwhelmed by the task.

In June, the HHS Office of Inspector General issued a report critical of the government’s ability to reconcile inconsistencies in the information about consumers who applied for a subsidized health plan during the first few months of the open-enrollment period. The most common inconsistencies, according to the report, involved citizenship and income information.

Inspectors also found that the federally run exchange was unable to resolve the great majority of those inconsistencies, or to even identify the number of consumers whose information did not match up with other federal records.

“The federal marketplace was unable to resolve 2.6 million of 2.9 million inconsistencies,” the report noted, “because the Centers for Medicare & Medicaid Services (CMS) eligibility system was not fully operational.”

Because one consumer can have multiple inconsistencies, the report noted, the federally run exchange was unable to determine the number of applicants affected early in the enrollment period.

However, Marilyn Tavenner, a CMS administrator, wrote on May 27 in a response to the inspector general’s draft report that the capability now exists to determine the number of consumers who showed at least one inconsistency.

Tavenner also stated that “it is not surprising” that there are inconsistencies in consumers’ information, given that it was the first year Americans could apply for coverage through the exchange.

“Consumers are inexperienced with the eligibility process, which could lead to application mistakes,” she wrote.

But the problem-plagued roll-out of healthcare.gov also contributed to a lack of thorough verification of applicants during the first months of enrollment, said Elizabeth Carpenter, a health reform analyst for Avalere Health, a Washington, D.C.-based consulting firm.

“There was a lot of benefit of the doubt given because things weren’t working particularly well early on,” Carpenter said. “The eligibility determination process was certainly rocky from the get-go.”

Attempts to verify an applicant’s information were often stymied, she said, by early problems accessing the so-called Data Hub, an electronic information clearinghouse that connects multiple government agencies, including the Internal Revenue Service, the Department of Homeland Security, the Department of Labor and the Social Security Administration.

The insurance exchanges use the Data Hub to verify a consumer’s information against federal records, such as tax filings and Social Security data. However, it is unclear whether verification is being conducted electronically, which would expedite the process, or manually, which would take much longer.

Verification could also be complicated by names being spelled differently in government records, a misplaced digit in a Social Security number, or “maybe because the person is not being honest,” Carpenter said.

“If the marketplace determines that an applicant is not eligible,” Carpenter said, “there could be a reconciliation process. Your monthly premium might change. If you got tax credits you weren’t entitled to, you might have to end up paying back some of that money.”

For consumers such as Martinez, the frustration of submitting multiple copies of information — only to have the government ask for it again and again — is almost worse than having to repay money he cannot afford.

“There’s no way out,” Martinez said last week, seated at his dining room table with a stack of papers detailing his efforts to follow the government’s requirements. “I need to know that I have healthcare when I need it.”

This story was produced in collaboration with Kaiser Health News, an editorially independent program of the Kaiser Family Foundation.

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