How subsidy-eligible enrollees got ‘false negatives’

Reaching the uninsured once the Affordable Care Act exchanges launched was always going to be a long, hard road. In 2014, 7 million Americans bought private health insurance plans on the exchanges, meeting the first-year forecast of the Congressional Budget Office, and about as many again enrolled in Medicaid under the ACA’s expanded eligibility rules. But CBO forecasts 25 million private plan enrollments by 2017, and 13 million Medicaid enrollments.

By now it’s clear that many who are eligible either for subsidized private coverage or Medicaid under the ACA don’t know that they’re eligible. Disturbingly, new data from the Kaiser Family Foundation, which regularly surveys the uninsured, suggests that many who actively sought coverage and were eligible for aid either received positive misinformation or misunderstood what they were told or what they saw online.

Survey findings

In a survey of over 10,000 low- and moderate-income Americans conducted this fall (first reported by Talking Points Memo’s Dylan Scott), Kaiser found that 37 percent of respondents who remained uninsured and whose current circumstances indicated that they were eligible for aid said that they were told that they were ineligible. Forty-nine percent of those who sought coverage and were told that they were ineligible (or understood as much) appeared, in fact, to be eligible – either for subsidized private plans (30 percent) or Medicaid (19 percent).

For some, circumstances may have changed between the time they applied for coverage and the time of the survey. But Kaiser’s numbers seem in sync with a McKinsey & Co. survey conducted last April, which found that about two thirds of respondents who sought coverage, were eligible for subsidies and cited affordability as the reason they remained uninsured were unaware that they were eligible for help paying for insurance.

How could so many insurance seekers have missed such vital information? The Kaiser study does not make it entirely clear what respondents meant when they said that they were “told” they were ineligible for help. More than half used Healthcare.gov or a state exchange; more than half also used more than one method to seek coverage, such as calling an exchange hotline, contacting a Medicaid office, getting non-profit in-person assistance, or using a broker.

Whatever combination of methods Kaiser’s respondents may have used, it was all too easy for an unassisted applicant to get the wrong response from Healthcare.gov or the state exchanges.

I spoke about various tripwires in the online application process with Kate Kozeniewski, a Certified Application Counselor with Philadelphia-based Resources for Human Development, who personally helped hundreds of people to enroll in ACA plans in the first open season. She outlined multiple ways that a subsidy-eligible shopper on Healthcare.gov might generate a “false negative” with respect to a premium subsidy or Medicaid eligibility. All of these misfires could occur on any state exchange as well, though some exchanges might communicate more clearly on some points.

Potential pitfalls for 2015 enrollees

If you are seeking coverage for 2015, then, beware these pitfalls:

1. No tax return/no subsidy: At the very outset, Healthcare.gov asks whether the applicant plans to file a tax return – which many people who earn too little to owe income tax habitually do not do. If you click “no,” however it’s “no subsidy for you,” Kozeniewski notes ruefully. There is no warning about this – if you say that you’re not going to file a tax return, you simply move on through the application, and learn at the end that you are ineligible for help paying for coverage.
2. Married? Then file jointly: If you’re married and file separately, you’re not eligible for subsidies. Here too, the website does not warn you that you’re forfeiting subsidies if you put down that you file singly. Kozeniewski has seen a surprising number of single filers. “It seems there’s a decent number of people estranged from their partners who have not gone through the steps of getting a legal divorce. We also see immigrants whose spouses are living in another country. There’s even a fair amount who are married and living in the same household, but who file separately for whatever reason.”
3. Immigrants barred from Medicaid: In most states, legally present immigrants are not eligible for Medicaid until they’ve been in the U.S. for five years – and in some states, not until they’ve worked for ten years. The ACA enables people in this situation to obtain subsidized private plans, even if their earnings are below the normal qualifying threshold for subsidies (100 percent of the Federal Poverty Level in states that did not expand Medicaid, 138 percent FPL in states that did). In 2014, however, the exchanges were inconsistent at best in recognizing this special eligibility – and according to Kozeniewski, most hotline support staff didn’t know about it. “You usually have to go to a supervisor on the hotline to get these applications through. The first person you talk to – they say no.”
4. Identity proofing: This, too, is a major barrier for immigrants. Many are required to submit documentary proof that they are who they say they are and that they’re legally present in the U.S. The documents, such as a green card, immigration visa or employment authorization card, can be scanned and uploaded to the exchange, but many immigrants will not manage those steps on their own and will either mail the required documents or give up. Once the documentation is submitted processing can take a “wildly different” length of time for different applicants, according to Kozeniewski. Applicants who don’t make it through the process – and who may have limited command of English – may conclude that they were deemed ineligible.
5. Error! Some applicants get a no-subsidy determination simply because of a computer glitch. “That happened a lot last year,” Kozeniewski says. Such glitches are much rarer this year. Perhaps, too, shoppers this year are likelier to recognize an erroneous determination, since the “shoparound” feature on Healthcare.gov and many state exchanges is easier to use and more prominently displayed than in the first open season. The shoparound enables a user to enter just a handful of data points – zip code, number of household members and their ages, and household income – and preview available plans, with price estimates based on the information entered. A user who’s gone through that process is likelier to question a no-subsidy determination than one who hasn’t.

Many of these routes to misinformation and application failure are less likely to occur in the current open season than in the ACA’s inaugural one, when all problems were exacerbated by the long months of website dysfunction. Some of these pitfalls could be more effectively addressed by improved site design, such as by popup warnings when a user response will kill eligibility for aid. All can be avoided by skilled in-person assistance, whether from nonprofit navigators and volunteer application counselors or from licensed brokers. All should become much rarer as the country continues on the rocky road to full coverage.

Andrew Sprung is a freelance writer who blogs about politics and policy, particularly health care policy, at xpostfactoid. His articles about the rollout of the Affordable Care Act have appeared in The Atlantic and The New Republic. He is the winner of the National Institute of Health Care Management’s 2016 Digital Media Award.