Before the next open enrollment begins, verification issues are lingering for several hundred thousand consumers on existing exchange plans, leaving insurers and providers facing a range of potential problems.
Approximately 363,000 individuals with subsidized exchange plans in the 36 states served by the federal marketplace have outstanding income discrepancies and need to submit documentation by September 30th to secure their tax credits.
Otherwise, they'll have their subsidies halted, although they will remain covered under their health plans of choice for as long as they pay their premiums, or for three months without paying their premiums, under the federal exchange's grace period regulations.
That latter prospect of consumers going into a grace period could create a lot of administrative challenges for health plans and even lead to claims disputes with providers, since health plans under the federal exchange's regulations can can deny or pend claims after 30 days.
The federal exchange started sending notices to about 1.6 million consumers with income-related data matching issues earlier this year. Of those, 467,000 households with income issues have had their problems resolved and another 430,000 household are in the process of being resolved.
But there are still 279,000 households spanning 363,000 individuals who haven't responded, and regulators are hoping another round of notices this month will grab their attention.
Consumers with income-related discrepancies aren't necessarily receiving subsidies unfairly, the Centers for Medicare & Medicaid Services stressed; upon additional documentation, some may see their cost-sharing reduced or some may see it increase.
"We are committed to keeping coverage affordable for the millions of Americans who depend on it, and to doing so in an efficient, transparent way that protects taxpayers," said CMS Administrator Marilyn Tavenner. "It's critically important that consumers who still owe income-related documents to the Marketplace send them in by September 30 so we can continue to hold down their costs."
There are also about 115,000 exchange policy holders who need to verify citizenship and residency, many of them in Florida, who also have until September 30 to send additional documentation. Those who don't will have their coverage cancelled.
In August CMS sent letters to about 310,000 federal exchange members with residency-related issues and now about 115,000 have outstanding discrepancies. Their policies will be terminated if they fail to respond by the end of the month, but if they get back to CMS after that, they may be eligible for a special enrollment period.
Outside the 36 states covered by Healthcare.gov, it's not clear how widespread income or residency discrepancies are in states with their own exchanges, like California or New York, two especially large ones.
What is clear is that insurers need to keep a close eye on these and other exchange hazards going into the second open enrollment period.
For one thing, the "HealthCare.gov backroom is not built yet," as consultant Robert Laszewski notes, making data transfer problems more likely to occur.
And it's an open question whether Healthcare.gov will be ready for an influx of new consumers and those coming to the website to re-validate their income and get the optimal subsidy.
The federal exchange will be notifying consumers about auto re-enrollment, listing their current subsidy, while health plans will be sending their own notices, listing the required premium contributions, after the subsidy. How many consumers decide to reapply to get a better subsidy is a big unknown.