We've been reviewing the premium tax credits and cost-sharing reductions eligible individuals can receive to help them pay for health care. Last week, we looked at how the government will verify that someone is eligible for these supports. The tax credits and co-pay reductions are great, but they help people a lot more if they can get them during the year so they don't have to wait until April 15 to get their money. The Patient Protection and Affordable Care Act has provisions to allow them to determine their eligibility and receive payment in advance.
The Department of Health and Human Services, working with the Treasury Department, must create a program whereby an individual's income eligibility can be checked in advance at the request of the state exchange. Upon making the determination, HHS notifies the exchange and Treasury; it gives Treasury the name and I.D. number of the individual's employer, if the employer does not provide minimum essential coverage or if the coverage meets the law's definition of "unaffordable"; and Treasury sends advance payments of the credits and cost-sharing reductions directly to the issuers of the health plans.
HHS will determine an individual's eligibility during the individual's open enrollment period, based on her household income for the most recent taxable year for which information is available. HHS must set up procedures for making advance determinations based on changes in circumstances. An individual claiming a 20 percent or greater decrease in income or filing for unemployment insurance may provide a later time period as the basis of estimated income. Also, the procedure must contemplate situations where the individual did not have to file a tax return in the second preceding taxable year.
HHS will pay the credits and cost-sharing reductions to plan issuers monthly or on some other basis established by the department. Issuers must then reduce the individual's premium, notify the exchange and HHS of the reduction, and show on the individual's bill the amount of the premium reduction. In cases where the individual fails to pay the premium, the issuer must notify HHS and give the insured three months to pay the amount due.
HHS may not make any payments, credits or cost-sharing reductions for illegal immigrants. States have the option to make payments to or on behalf of individuals that are in addition to the federal payments.
HHS must create a program for screening individuals who apply for coverage through an exchange to see if they qualify for state health programs. The program will automatically enroll eligible individuals in Medicaid and or the state children's health insurance program. The deparmtnet must create an easy to complete application form in paper and online formats, but states can develop their own as long as they meet the law's standards. States will create secure electronic interfaces that allow the exchange of eligibility data for all health programs based on a single application form. The state health programs will participate in data matching arrangements for determining eligibility, and they will verify eligibility using reliable third party data, unless they find that the cost outweighs the expected gains in accuracy, efficiency, and program participation. Exchanges can contract out the eligibility determination tasks to state Medicaid agencies if they meet standards for feduced administrative costs, eligibility errors, and disruptions in coverage.
Lastly, the law authorizes the Treasury Department to provide taxpayer information to HHS, and HHS is authorized to notify excnahges of any inconsistencies between the information they have and the information HHS got from Treasury. Use of taxpayers' personal information is restricted to determining eligibility for participation in the exchanges and in state health programs. HHS and the exchanges are allowed to collect and use participating individuals' names and Social Security numbers. When participating individuals apply for other federal assistance, the amounts of their premium tax credits and cost-sharing reductions will not affect their eligibility.
Next time: What's in it for small business.
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"Once the bill is enacted, all health insurance plans would be required to spend at least 85 cents of every dollar paid in premiums each year to providing actual health care. If, in a given year, an insurer doesn’t spend that amount on health care, they would have to give their extra profit back to their customers in the form of rebates. Only 15 percent of premiums max could be used for marketing, administration, underwriting and profit. And the HHS Secretary could up the ratio from 85-15 if she saw fit."
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