Obamacare glitch leading to canceled policies, some say
Connecticut Republican leaders this weekÂ announced there’sÂ a new problem withÂ Obamacare: Constituents calling to say their insurance policies had been canceled because the subsidies that help discount their premiums hadnâ€™t been paid.
Like other controversies related to the health law, this one fell into something of a gray area. Its scope was unclear: Were these isolated cases, or signs of a widespread problem? In an election year, how much was this concern charged with politics? GOP leaders have been critical of the stateâ€™s health insurance exchange and Obamacare, and the way they described the problem wasnâ€™t fully accurate.
But according to people involved with insurance, the issue of mistaken policy cancellations is real, if not necessarily widespread.
In a letter to exchange CEO Kevin Counihan, House Minority Leader Lawrence F. Cafero Jr., and Senate Minority Leader Pro Tem Leonard A. Fasano wrote that constituentsâ€™ premium subsidies reportedly hadnâ€™t been paid by Access Health CT, the stateâ€™s exchange. â€śIf this is the case, we find it extremely troubling that this situation has been allowed to occur,â€ť they wrote.
The letter isnâ€™t entirely correct: The federal government, not Access Health, is responsible for paying subsidies to the insurers. And Anthem Blue Cross and Blue Shield, the only insurer that acknowledged having issues related to subsidies, said it wouldnâ€™t cancel a member solely because the subsidy wasnâ€™t paid.
But there have been some problems with the information the exchange transmits to insurers about clients that have, in some cases, led to billingÂ issues orÂ members’ policies being canceled, according to insurance brokers and others involved in coverage. The information sent from Access Health is supposed to include details about clients and whether the person is entitled to a subsidy. It’s used to generate each client’s bill, so inaccuracies in the data could lead to aÂ customer being billed for — and paying — the wrong amount.
Anthem acknowledged that there have been cases in which it learned a member had been entitled to a subsidy only after the personâ€™s policy had been canceled following a grace period. In those cases, the company reinstated the member and provided retroactive coverage, spokeswoman Sarah Yeager said in a statement. Insurance companies are supposed to receive information about customersâ€™ eligibility for subsidies in the enrollment information they get from Access Health.
State Healthcare Advocate Victoria Veltri said her office has handled a few cases in which exchange customers have gotten billed for the wrong amount from their insurer, often because the insurance company didnâ€™t deduct the amount that would be covered by the federal subsidy. She said there have been some glitches with the transmissions of information that go from Access Health to the insurers.
â€śI donâ€™t think itâ€™s that widespread,â€ť said Veltri, who also serves as vice chairwoman of the exchangeâ€™s board. â€śI would think weâ€™d be getting more calls about this.â€ť
The lack of clarity on how broad the issue is points to a bigger challenge in evaluating how Connecticutâ€™s roll out of the massive health law is going. With no ready way to collect data on customersâ€™ experiences, itâ€™s difficult to gauge whatâ€™s an isolated anecdote and whatâ€™s a systemic issue. Thatâ€™s particularly challenging on a topic thatâ€™s so polarizing, with supporters looking to tout any success and critics looking to expose any flaws.
Rep. Rob Sampson, R-Wolcott, said heâ€™s had constituents whose policies were canceled after problems with their subsidies. Sampson, the ranking House member on the legislatureâ€™s Insurance and Real Estate Committee, has pushed for more data reporting from Access Health, but the measure his caucus proposed earlier this year died in committee.
Sampson said he understands there will be glitches in any major undertaking, but he said the exchange needs to be more forthcoming about problems.
â€śThe one issue I have more than anything, I guess, is that Access Health never does anything but take credit for good things and dismisses bad things as if theyâ€™re not their responsibility,â€ť Sampson said.
In their letter, Cafero and Fasano noted that Connecticut’s exchange has been “held up repeatedly as the model for how states might incorporate the Affordable Care Act,” and asked for information about the source of the problem, how many people are affected, and what will be done to address it.
Counihan, the exchange CEO, replied that Access Health had not received any complaints of the sort the Republican leaders cited.
He said in an interviewÂ that he wasnâ€™t aware of policies getting canceled because of subsidy issues.
Counihan saidÂ less than 2 percent of the exchangeâ€™s customers have made complaints, which could cover issues includingÂ getting incorrect premiums or problems with subsidies. More than 240,000 people have enrolled inÂ coverage through the exchange — about 80,000 inÂ private insurance plans and nearly 160,000 inÂ Medicaid.
When someone enrolls in private insurance through Access Health, the exchange transmits information about the person, his or her plan selection and any subsidies through something known as an â€ś834,â€ť an electronic file that the insurance company then retrieves.
Tim Tracy Jr., president of the Connecticut Chapter of the National Association of Health Underwriters and a Fairfield insurance broker, said heâ€™s aware of insurers sometimes receiving 834 files with missing or inaccurate information. In the case of one of his clients, the insurance company received an 834 that said to terminate the personâ€™s coverage, so the carrier did, Tracy said.
â€śThere can always be some issues with those 834 file feeds,â€ť he said.
Counihan said there are three main causes of issues with 834s: vendor errors, consumer errors and late changes to client files during the application process.
In the case of paper applications, errors could occur if the vendor that enters the information into the exchangeâ€™s system submitsÂ data incorrectly. If the person entering the data leaves the income line blank, for example, the 834 would show the applicant doesnâ€™t qualify for a subsidy, even if the personâ€™s application contained income information.
In other cases, Counihan said, applicantsÂ have appeared to try to get themselves the best subsidy possible by entering different income levels and counties. Each separate application can trigger an 834 to be sent to a carrier. â€śWeâ€™ve had instances where there have been north of 15 different applications for the same person,â€ť Counihan said.
Another issue can arise if a person makes a change to an application that was already filed, such as entering a different ZIP code or adding a family member. That generates a new 834, which the insurer might get after already preparing the customer’s billingÂ statement.
Asked if there could be problems with the exchangeâ€™s system that contributed to problematic 834s, Counihan said the exchangeâ€™s IT team had examined it and concluded that was not the case. He noted that software errors tend to be consistent.
â€śWeâ€™ve processed 208,000 of these things,â€ť he said. â€śIt feels to me like if that were the case, weâ€™d have this huge number of 834 problems, and weâ€™re not.â€ť
Counihan also cited another issue with subsidies: People who apply for coverage sometimes donâ€™t accurately represent their income, leading them to qualify for a larger discount on their premiums than theyâ€™re really entitled to. If a subsequent verification process determines that their income is higher, their subsidies are reduced, and a new 834 is sent to the insurer. As a result, a personâ€™s next premium bill might be much higher than the previous ones.
â€śHave I heard about that being a screaming issue? No,â€ť Counihan said. â€śDo I think that itâ€™s impacted some people? Iâ€™m sure it has.â€ť
â€śHow many people itâ€™s impacted I donâ€™t know, but weâ€™re in the process of calling the carriers right now to try to better understand that,â€ť he added.
A spokeswoman for ConnectiCare Benefits said the company is not aware of customer policies being canceled because of subsidies being unpaid. According to the insurer HealthyCT, the company has not had any issues with 834s or subsidies.
Asked if it had any issues with inaccurate 834s coming from Access Health, ConnectiCare Benefits issued a statement saying:Â â€śAs expected with any complex implementation, our first year of selling health plans through Access Health CT has included some administrative challenges.Â We work closely with Access Health CT to resolve processing issues on a case by case basis as they arise. Issues are corrected and treated as improvement opportunities for the future.â€ť
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