Implementing Health Reform: The State Of The Exchanges, Income Verification, And More

By Timothy Jost
Health Affairs Blog, October 16, 2013

Information collection.

On October 11, 2013, HHS published a notice of information it was intending to collect to establish individual mandate exemptions.

There is nothing new in this notice, but the scope and number of exemptions from the ACA’s individual responsibility requirement are truly impressive.  In addition to the religious conscience, health care sharing ministry, incarceration, Native American tribe membership, and lack of affordable coverage exemptions, there is an extensive list of hardship exemptions, including:

* Homelessness;

* Eviction in the previous 6 months or the threat of eviction or foreclosure;

* A utility shut-off notice;

* Recent death of a close family member;

* A fire, flood, or other natural or human-caused disaster that caused substantial property damage;

* A bankruptcy filing in the last 6 months;

* Medical expenses in the past 24 months that could not be paid;

* Unexpected increases in necessary expenses due to caring for an ill, disabled, or aging family member;

* The presence in the household of a child claimed as a tax dependent who was denied coverage in Medicaid and CHIP where another person is required by court order to give medical support to the child. In this case, the penalty need not be paid for the child;

* A favorable eligibility appeals decision that makes an individual eligible for enrollment in a qualified health plan (QHP) through the Exchange, lower the costs on monthly premiums, or provides cost-sharing reductions, which removes the penalty for the time the individual was not enrolled in a QHP through the Exchange; or

* Residence in a state that fails to expand Medicaid if the individual would have been eligible for Medicaid.

HHS estimates that 24 million Americans will be eligible for individual responsibility exemptions and that as many as 12 million will apply for exemptions through the exchange.  In most instances, documentary evidence will need to be supplied to verify the exemption.  Unless the federal exchange website is vastly improved in the not too distant future, this could create major problems for the implementation of the individual responsibility requirement.… – Supporting Statement for the Information Collection Requirements Contained in the Exemptions Eligibility Information Collection Request (25 pages):–10466.html

The Affordable Care Act includes multiple categories of exemptions from the shared responsibility payment – the penalty for remaining uninsured. This new CMS release defines the category of hardships which would allow you to remain uninsured without having to pay a penalty. When you check the list, it seems that most of these hardships would indicate a greater need for having health care coverage. But instead of seeking ways to fill these gaps, ACA simply cuts these people loose with no coverage at all.

The largest category of those who are exempt from the requirement to be insured are those who simply cannot afford to pay for their share of health insurance premiums. That includes families whose incomes are so low that they are not required to file income tax returns, and individuals who would have to pay more than 8% of their incomes for premiums beyond employer contributions or tax credits for the exchange plans. It includes individuals who would have been eligible for Medicaid but are excluded simply because their states elected not to participate in the Medicaid expansion.

HHS estimates that 24 million Americans will be eligible for exemptions from the shared responsibility payments. That is, 24 million individuals will have the right to remain uninsured without having to pay a penalty. That is quite a stipulation for an Act that was supposed to bring health care to everyone. 24 million!

Clearly our politicians selected the wrong model for reform. We do not have to put up with this. If enough of us protest vehemently, we should be able to get our politicians to replace this highly dysfunctional system with a single payer national health program – an improved Medicare that covers everyone – absolutely everyone.