For state exchanges still struggling to function, and governors facing the consequences, the Centers for Medicare & Medicaid Services is offering an exception to the rule of tax credits only being available through public marketplaces.
State exchanges that "have had difficulty in providing timely eligibility determinations to applicants and enrolling qualified individuals" now have several last-minute options to offer consumers advanced premium tax credits.
In a new bulletin from CMS's Center for Consumer Information and Insurance Oversight, regulators wrote that insurance exchanges with such "exceptional circumstances" -- including, presumably, those operated by Healthcare.gov -- can make premium tax credits and cost-sharing reductions available on a retroactive basis, both for policies purchased (or in the process of being purchased) through public exchanges and those bought through private exchanges, brokers or directly from insurers.
If "an individual in the exceptional circumstance" has enrolled in a qualified health plan offered outside of a public exchange, CMS regulators explained, "when he or she receives a determination of eligibility for coverage through the Marketplace, the Marketplace may deem the individual to have been enrolled in the QHP through the Marketplace retroactive to the date on which the individual first enrolled in the QHP outside of the Marketplace."
In other words, eligible consumers buying policies outside of public exchange will be eligible for tax credits as long as those policies are also being sold in public exchanges, although it seems consumers will have to pay the full amount of the premiums until the retroactive payments are made, unless insurers decide to accept what they'll be estimated to have pay.
Until the federal government makes the retroactive payments to issuers for tax credits and cost-sharing reduction, the "individual will be responsible for the enrollee's portion of the premium for the retroactive coverage period," CCIO regulators wrote.
"If the Marketplace determines that the individual is eligible for APTCs and CSRs, and the individual is assigned to a cost-sharing reduction plan variation, CMS will provide advance payments of the PTC and CSRs to the issuer on a retroactive basis back to the effective date of Marketplace enrollment."
After that, it will be up to insurers to re-adjudicate the claims incurred by the individual starting from the retroactive enrollment date and credit or refund any excess cost sharing or premium amounts, the bulletin said. Unless consumers request refunds, those credits can be made towards future premium payments.
Exchanges will also have to "provide a special enrollment period" to "allow these individuals the opportunity to change QHPs prospectively at the time the eligibility determination is received."
This latest HIX triage comes with just one month left in open enrollment and after lobbying in particular by Oregon Gov. John Kitzhaber, whose state exchange, Cover Oregon, had to resort to processing paper applications in the absence of a working website and was unable to meet the promise of offering Jan. 1 coverage to those who applied by paper in December. .
"I have been working closely with the Oregon Legislature and the Centers for Medicare & Medicaid Services to ensure that Oregonians who enrolled in health insurance plans outside of our insurance exchange would still be able to claim tax credits that are a key benefit of the Affordable Care Act," Kitzhaber said in a media release.
The new option creates a number of new administrative tasks for insurers and the federal government to complete. But in the long-run, those administrative challenges may be well worth it if the new option ends up restoring consumer confidence in the Affordable Care Act and helps improvement enrollment.