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Helping People Keep Marketplace Coverage and Subsidies

Over the next few months, many of the 9.6 million people who chose a health plan for 2016 in the 38 states using the Federally Facilitated Marketplace (FFM) must submit documents proving their eligibility or risk losing coverage or the federal subsidies they receive to help pay for their premiums.  About 470,000 people lost FFM coverage and over 1 million households lost some or all of their subsidies in 2015 because they had problems proving their eligibility.  The Department of Health and Human Services (HHS) has improved the eligibility verification processes, but we can do more to help both consumers and insurers, as I explain in a new commentary.

Health insurers have made claims, which haven’t been substantiated, that too many people are inappropriately using special enrollment periods in the marketplaces to get care when they’re sick, thus weakening insurance markets and raising premiums.  Insurers have focused less on data-matching issues that present problems for both themselves and consumers.

In fact, these issues should raise concerns for insurers, because when people are repeatedly asked for additional documentation, those who give up on the process at some point — and consequently lose coverage — are likely to be healthier-than-average people.  Insurers then end up with a less healthy, costlier group of enrollees. 

Most people who lose coverage or subsidies because of documentation issues are likely eligible.  HHS has improved the processes for verifying eligibility in order to reduce the number of people who must provide follow-up documents, but we can do more to limit the number of eligible people who lose coverage — and thereby help stabilize insurance markets.

For instance, the notices that the marketplace sends requesting proof of citizenship, immigration status, or income aren’t specific to an individual’s situation.  Consumers can’t get individualized help when they reach the marketplace call center to ask what they need to provide.  Giving individuals specific information about how they can verify their eligibility would significantly limit the number of people who lose coverage or financial assistance.  Better training of application counselors, the call center, and insurers would also help steer people in the right direction.

Many people who signed up for 2016 coverage will have to prove their eligibility over coming weeks.  Getting them the support they need so they provide the information that the marketplace is seeking will help them stay enrolled — and in so doing, help stabilize the marketplace risk pools. 

Click here to read the full commentary.