There were errors from the start regarding the calculation of Jessica Sanford’s subsidies. It has led her down a long and winding road to a decision NOT to purchase coverage. Here is the comedy of errors…
Big Goof by State
Four days after President Obama made his address, the state health exchange publicly revealed a grevious error – its tax-credit calculations were all wrong. The state had been submitting monthly income information to the federal data hub, but the federal computers were expecting an annual figure. Suppose a person claimed an income of $50,000 a year — the tax credit was based on an income of $4,166 a year. The higher the income, the bigger the error. Brokers say they caught the mistake right off the bat and tried flagging it to the state’s attention, but for some reason it took the state three weeks to acknowledge it. So everyone who purchased a subsidized health insurance policy through the Washington state exchange prior to Oct. 23 was quoted too low a rate. The mistake involved 4,600 policies covering 8,000 people – Sanford’s policy was one of them.
The state sent a letter saying mistakes were made. And so she went back to her broker and tried again. They went over her income and made a more careful calculation of her business tax write-offs. But this time the website showed she qualified for a much lower tax credit, just $110.
With a gulp, she signed up for a less-expensive “silver” plan from Premera – meaning that it had higher deductibles and copays. Still her premium went up. “I knew I would be struggling in my slow months. I didn’t know how I was going to do it. But honestly, I just wanted to get it in my budget and start working on it right away and start working on saving money toward it – that was all I could do, just work at it and hope for the best and try to take the money from here or there or wherever.”
Sanford had managed to save enough money for half of the first month’s payment when she got another letter from the state last week. It had goofed again. She qualified for no tax credit at all.
Medicaid Eligibility Becomes Problem
The hitch was that the website told her that her income was low enough that she could enroll her son in the state Medicaid program for children of low-income families, known as Apple Health. For that she would have to pay a premium of just $30 a month. She could enroll him right away, and she did. But that created a problem. When she enrolled Ryan in Medicaid, she couldn’t count him toward a tax credit. Not that the website mentioned it. In fact, it gave her the opposite impression.
Once the new health insurance policy kicked in on Jan. 1, the premium was supposed to be $280 a month, plus, she assumed, the Medicaid premium. But after she signed up for a policy, and after she gave her credit-card information, she got a letter from the state last week saying that her income was too high to qualify for subsidies – the cutoff is $44,680 for a single adult, 400 percent of the federal poverty level. So she would get no help from the feds at all.
“I was dumbfounded,” she said. “I thought this was a total mistake, they’re going to correct this — this isn’t true. How could I not qualify for a tax credit? I make under $50,000 a year. There’s got to be something. So I got ahold of my broker, and a couple of days later he called me back, and he told me that no, it was true.”
Now she says her health-insurance dream has gone bust. Without a tax credit she has to consider the cheapest “bronze” level plans, but the deductibles are so high that couldn’t afford to purchase prescription medication. “I was like, forget that – I’m not going to pay.”
So now she is looking forward to no health insurance at all. Under the terms of the Affordable Care Act, she will have to pay a penalty of $95.
Amateur’s everywhere. You can’t make this stuff up. Unfortunately, while these errors may not be repeated, the issue with chlidren being put on Medicaid or CHP+ plans and affecting subsidies is real.