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Closer Look at Marketplace Enrollment Shows Need to Improve Data-Matching Process

A Senate Finance Committee hearing tomorrow will examine how the federal health care marketplace, operating in 38 states, verifies eligibility.  The Government Accountability Office (GAO) recently issued a report on what the marketplace does when electronic data don’t match an applicant’s stated information or aren’t available to verify an applicant’s sworn attestations.  The process has proved challenging for consumers, and thousands have lost coverage or subsidies to help pay their premiums, as I’ve written — and the Department of Health and Human Services (HHS) could do more to address the problem.

The GAO report focuses on the 2014 coverage year, during which HHS couldn’t resolve many cases with data inconsistencies because it was having trouble launching the marketplace.  In 2015, when there were no delays in processing cases with inconsistencies, about 500,000 consumers lost coverage, and over 1 million households lost some or all of their subsidies, because they had problems proving their eligibility.  The vast majority of these people were likely eligible, as was also true in 2014.

Inconsistencies occur for many reasons.  Consumers may not have Social Security numbers (SSNs) for all family members readily available when they apply, applicants’ legal name may not be the same as their name when they received their immigration status or SSN, or the Social Security Administration may be unable to verify the citizenship of citizens born outside the United States.  The tax information used to verify income is out-of-date for many people, unavailable for many others.  This may be because applicants were dependents in another tax household in prior years, they filed with a former spouse, or they didn’t have a tax filing requirement.  Young workers new to the workforce often don’t have tax data to compare to their attestations of income. 

In these situations, consumers must send documents to the marketplace to prove they’re eligible.  Often they lose coverage or some or all of their subsidies because they don’t get clear guidance on what they need to send.  Notices aren’t specific to an individual’s situation and instead, provide general lists of the types of documents that applicants can send.  Consumers also can’t get individualized help from the marketplace call center.

While the GAO reports that premium credits went to consumers who didn’t clear their inconsistencies in 2014, these were not improper payments.  HHS didn’t find applicants ineligible for coverage or subsidies; it just couldn’t verify the information they swore to on their applications with suitable documentation. Most of these consumers likely were eligible, but the challenging process led many to lose their coverage or subsidies, as an Associated Press report recently described.

HHS has improved the online marketplace application since 2014 by providing prompts on why entering Social Security and immigration document numbers is important to enable the marketplace to verify citizenship and immigration status using electronic data. This reportedly has significantly reduced the number of cases with citizenship and immigration inconsistencies.

But HHS could do more to limit inconsistencies by expanding the electronic sources of data for real-time verification and giving consumers more guidance about the documents to send to verify their income.  The GAO’s recommendation that the marketplace call center have up-to-date information on the current status of cases with inconsistencies would also help consumers get timely information on how they can finalize their enrollment.