Drilling down into numbers uncovers Marketplace glitch Date: 04/07/14
By Don Sapatkin
Ten days before the (expected) close of open enrollment, The Philadelphia Inquirer reported that the federal exchange's window-shopping tool – the one that the administration encourages everyone to check before applying for Marketplace insurance – was using the wrong year's poverty-level guidelines. Neither the Obama administration nor any health-care consultants or policy experts that I could find had noticed it; the site was corrected within hours after our story posted.
In theory, almost anyone going on the site got slightly incorrect information for 35 days. Most seriously affected, however, were people just above the poverty line in states that have not expanded Medicaid. When they put their information into the tool, it responded: “Not eligible for help paying for coverage.” Many of them may have given up right there and not submitted the actual applications (which were using the correct poverty stats and were assessed correctly). It’s impossible to tell from the notification letter whether errors were made.
This was a relatively quick, low-tech story. It grew out of research for a fancy graphic on local health statistics that we run every Sunday. With open enrollment winding down, I wanted to illustrate what seemed to be the most under-appreciated aspect of the Marketplace – discounts on deductibles, co-payments and coinsurance for people between 100 percent and 250 percent of poverty who buy silver plans. The discounts can be worth more than the tax credits that subsidize premiums.
Looking for a good combination of income, household size, and bronze and silver plans, I first ran a bunch of possibilities through the Kaiser Family Foundation subsidy calculator. Kaiser doesn't include actual plans, so I moved on to HealthSherpa.com. The two sites came up with matching subsidy amounts sometimes but not other times, so I started running examples through Healthcare.gov; it, too, matched HealthSherpa sometimes and not other times.
The discrepancies were driving me nuts, so I tried to locate the income cutoffs for “eligible” vs. “not eligible” – by putting much higher (or much lower) incomes into the tools and then gradually narrowing them down until it changed. I found the cutoff for 100 percent of poverty for an individual and, out of curiosity, looked at the poverty level guidelines I had thumbtacked nearby: It was for 2014, which the Centers for Medicare and Medicaid Services had announced in January would not be used for Marketplace subsidies. It took five minutes to run the same numbers for different household sizes just above and just below 2013 and 2014 poverty levels. The difference was $180 for an individual, $300 for a household of four. That’s not much, and it may not have affected many people – but if you were one of the families told incorrectly that there was no financial assistance for you and you made decisions based on that, you would have given up insurance that came with $6,000 to $8,000 in premium subsidies and an additional $4,000 to $8,000 in discounts for out-of-pocket costs (with a silver plan).
Kaiser had correctly used 2013 all along; Healthcare.gov had been wrong. HealthSherpa.com, it turned out, had fixed its site after I innocently asked which poverty level applied, which is why some of its responses matched one site and others matched the other. As I was figuring this out, the graphic that started it was coming together and needed to be fact-checked. Independence Blue Cross, whose plans were being used for the graphic, sent back a spreadsheet that corrected, by a couple of percentage points, the percent-of-poverty equivalent for a couple's income that I had used in the graphic. The insurer had been relying on its own window-shopping tool, which was wrong as well.
The graphic ran two days after the news story. In a second-day story, Independence Blue Cross' calculator-building vendor told me that there were multiple other sites with these problems; a health-care consultant for several state exchanges said some of those might be screwed up as well. It was quite confusing for people not steeped in the issues: When the 2014 poverty level guidelines came out in January, all these sites correctly updated their calculators for Medicaid but didn't realize or didn't insert the necessary code to retain 2013 levels for the Marketplace, as required by language in the Affordable Care Act because open enrollment began in 2013.
It took hours to get the Centers for Medicare and Medicaid Services to understand what I was telling them. High-level press people directed lower-level press people to call me back and explain how it worked. One sent me a document that exactly described what CMS was not doing. I finally had to insist that she go through the window-shopping exercise with me until she had an “Ah ha” moment.