Centers for Medicare and Medicaid Services, June 26, 2013
The Department of Health and Human Services (HHS) finalized provisions concerning how Marketplaces (also known as “Exchanges”) will determine eligibility for and grant certificates of exemption from the individual shared responsibility payment described in section 5000A of the Internal Revenue Code.
This guidance is intended to describe the circumstances that Marketplaces may use in determining what constitutes a hardship if they prevent an individual from obtaining coverage under a QHP.
We clarify that Marketplaces may consider the following circumstances in determining what constitutes a hardship under 45 CFR 155.605(g)(1) if they prevent an individual from obtaining coverage under a QHP, which include an individual who–
* becomes homeless;
* has been evicted in the past six months, or is facing eviction or foreclosure;
* has received a shut-off notice from a utility company;
* recently experienced domestic violence;
* recently experienced the death of a close family member;
* recently experienced a fire, flood, or other natural or human-caused disaster that resulted in substantial damage to the individual’s property;
* filed for bankruptcy in the last 6 months;
* incurred unreimbursed medical expenses in the last 24 months that resulted in substantial debt;
* experienced unexpected increases in essential expenses due to caring for an ill, disabled, or aging family member;
* is a child who has been determined ineligible for Medicaid and CHIP, and for whom a party other than the party who expects to claim him or her as a tax dependent is required by court order to provide medical support. We note that this exemption should only be provided for the months during which the medical support order is in effect; or
* as a result of an eligibility appeals decision, is determined eligible for enrollment in a QHP through the Marketplace, advance payments of the premium tax credit, or cost-sharing reductions for a period of time during which he or she was not enrolled in a QHP through the Marketplace, noting that this exemption should only be provided for the period of time affected by the appeals decision.
By Don McCanne, M.D.
The Affordable Care Act (ACA) requires that individuals who fail to enroll in a qualified health plan (QHP) be required to make a shared responsibility payment (a financial penalty for being uninsured). There are several exemptions that allow the penalty to be waived, and one of these is “individuals who experience a hardship.” This guidance defines what constitutes a hardship.
Supposedly a goal of health care reform was to be sure that everyone had health care coverage, but especially those whose personal finances made purchase of insurance prohibitive. That is why the most important provisions of ACA included the expansion of Medicaid for individuals at or near poverty and the establishment of income adjusted subsidies for purchase of private plans within the insurance exchanges (Marketplace).
The shared responsibility payment penalty was established to encourage those who could afford insurance to buy it, with a goal of approaching truly universal coverage.
When it was realized that there were many legitimate situations in which individuals would not qualify for either Medicaid or the subsidies for the exchange plans and yet could not afford to purchase plans, it was thought that it would be unfair to penalize these individuals for being uninsured, as if that were not enough of a penalty. Thus the exemptions from the penalty were established.
Of the exemptions, hardship is perhaps the most compelling. But think about that. These are individuals who have the greatest need to have the security of health care coverage, yet, instead of establishing measures that would bring them under the insurance umbrella, they are being left bare – exposed to greater financial hardship and greater barriers to health care access.
Is this the best that we can do for these people – waive a financial penalty for the sin of being uninsured – a penalty that they couldn’t pay anyway?
Absolutely everyone should be covered – automatically. How many times do we have to say it? Single payer.