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Posted by on May 17, 2014 in Health, Politics | 7 comments

New Obamacare glitch: Federal health-care subsidies may be too high or too low for more than 1 million Americans

shutterstock_146319131 (1)A new Obamacare glitch is in the news and it means a)the administration still has a lotta tinkering to do, and, b)the Republicans will have an opening and will most defiinitely seize it. It’ll also add to the image of Obamacare as being something thought out but done by-the-seat-of-the pants:

The government may be paying incorrect subsidies to more than 1 million Americans for their health plans in the new federal insurance marketplace and has been unable so far to fix the errors, according to internal documents and three people familiar with the situation.

The problem means that potentially hundreds of thousands of people are receiving bigger subsidies than they deserve. They are part of a large group of Americans who listed incomes on their insurance applications that differ significantly — either too low or too high — from those on file with the Internal Revenue Service, documents show.

Republicans will point to the too highs and attack Obamacare as one more entitlement where the requirements are not even being verified.

The government has identified these discrepancies but is stuck at the moment. Under federal rules, consumers are notified if there is a problem with their application and asked to upload or mail in pay stubs or other proof of their income. Only a fraction have done so, according to the documents. And, even when they have, the federal computer system at the heart of the insurance marketplace cannot match this proof with the application because that capability has yet to be built, according to the three individuals.

The phrase “not ready for prime time” may come to mind for some voters, even the many who are relieved Obamacare is in place.

So piles of unprocessed “proof” documents are sitting in a federal contractor’s Kentucky office, and the government continues to pay insurance subsidies that may be too generous or too meager. Administration officials do not yet know what proportion are overpayments or underpayments. Under current rules, people receiving unwarranted subsidies will be required to return the excess next year.

The inability to make certain the government is paying correct subsidies is a legacy of computer troubles that crippled last fall’s launch of and the initial months of the first sign-up period for insurance under the Affordable Care Act. Federal officials and contractors raced to correct most of the technical problems hindering consumers’ ability to choose a health plan. But behind the scenes, important aspects of the Web site remain defective — or simply unfinished.

White House officials recently have begun to focus on the magnitude of income discrepancies. Beyond their concerns regarding overpayments, members of the Obama administration are sensitive because they promised congressional Republicans during budget negotiations last year that a thorough income-verification system would be in place.

Meanwhile, there’s a whole group of Americans who may be falling through the cracks or who are facing problems with the bureaucracy…and their elected officials.

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  • dduck

    Boy you Reps just love to quibble over minor details. And the author of that article is probably not qualified to compare policies besides working for a questionable newspaper that keeps repeating Rep talking points.
    Aren’t you satisfied that a whole bunch of people that weren’t insured before are now able to choose between the emergency room and a choice of top notch doctors and hospitals. So what if they could have been covered a few years ago at a far lower cost to the country with a simpler plan, look at it this way with over 2,000 pages, we now have coverage for preexisting conditions and for kids up to 26 on their parents policies, not to mention that if your son is some day able to have children, he will get free contraceptives and maternal care. There’s a lot of other good stuff in the ACA and the average plan will cost us a lot less, but maybe not the $2, 000 plus they projected; that will take some time as will trying to figure out how to ask the insurance companies who has paid and who has not, they are rather busy, maybe next year. . Plus, isn’t your new doctor nice, you probably should have left your old one a long time ago, that’s progress; a new plan a new doctor a new hospital.
    So look on the bright side and stop nitpicking.

  • sheknows

    “They are part of a large group of Americans who listed incomes on their insurance applications that differ significantly — either too low or too high — from those on file with the Internal Revenue Service, documents show.”

    If they made 22K last year, but this year they may only make 19K or vice versa they will just have to play catch up at the end of the year. It’s not the end of the world. Example. my friends neighbor made 25K last year but doesn’t know exactly how much he will make this year because he lost his job and started a new one with uncertain hours.

    These kinds of income adjustments will be there every year for many in the work force.


    One problem with the article is a complete failure to attempt to identify problems like the one sk identifies. Large numbers of people in this country have incomes that can vary from year to year for a variety of reasons.

  • It is hardly news that the web site was poorly prepared. Once the problems were found, they concentrated on the front end to get people enrolled during the open enrollment period, with back end problems still being worked on. It was more important to get people signed up, and they can make adjustments next year for those who received incorrect subsidies.

    The other problem Joe mentioned at the end refers to the huge backlog in California of people who qualify for the expanded Medicaid program but California hasn’t been able to keep up with processing all those who qualify.

  • rudi
  • sheknows

    The rest of the source article went on to say….”Bataille also added that “an inconsistency does not mean there is a problem with a consumer’s enrollment” but that the consumer must send in additional documentation to verify whether their application information is accurate. “We’re working every day,” she said, “to make sure individuals and families get the tax credits they deserve and that no one is receiving a tax credit they shouldn’t.”
    This should also be mentioned as a way of giving perspective to the article.

    LIke I said…..not the end of the world. Certainly nothing to indicate there is anything wrong with the tenets of the Affordable Care Act as Republicans would/will have us believe..

  • dduck:


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