By Katie Kerwin McCrimmon
Snafus processing federal tax credits for 2014 health exchange customers have left Colorado insurance carriers waiting for payments totaling at least $20 million, exchange managers revealed on Monday.
At the same time, an enrollment manager for Connect for Health Colorado in the western part of the state warned board members that she and fellow workers are having major problems enrolling people for 2015. The deadline to enroll for coverage that starts on Jan. 1 is Dec. 15. So far, about 10,000 people have signed up for private health insurance for 2015 through the state’s exchange, which has cost taxpayers tens of millions of dollars to set up. Of those who’ve signed up so far, only about 3,300 people are new customers. The rest renewed coverage from this year.
“Our enrollments are very, very low because of system issues,” said Jackie Sievers, a director of enrollment for four assistance sites in western Colorado.
She called in to an exchange board meeting and said she only has been able to complete about one in five applications.
“Other sites in my region are reporting 1 percent (completion rates) or even lower. My concern is that our open enrollment period is much shorter this year and we have some pretty significant issues and are having trouble getting people signed up,” Sievers said.
She said the system incorrectly calculates federal tax credits, known as APTC — which stands for advanced premium tax credits. The credits come from the federal government and are designed to make health insurance more affordable. On top of problems with the tax credits, Sievers said anyone seeking coverage through the small business portal, known as SHOP, can’t complete applications.
“The SHOP doesn’t work. It disappears and kicks people out,” Sievers said.
When enrollment guides try to get help, Sievers said they get sent back and forth from Medicaid workers to customer service agents for the exchange. State Medicaid managers spent millions this year creating a new IT portal known as the “shared eligibility system” that was supposed to make it simple for customers to sign up and qualify for Medicaid or get sent to Connect for Health to buy private insurance. But Sievers said systems are generating frustration instead.
“I think this is a broader issue than my site,” she said.
While workers are struggling to help people sign up for 2015, board member Steve ErkenBrack called attention Monday to the fact that exchange system problems have left insurance companies waiting for millions in payments for customers who qualified for federal tax credits this year.
ErkenBrack is president of Rocky Mountain Health Plans, a large insurance carrier. He asked Connect for Health’s interim CEO Gary Drews to do a better job of updating board members on problems the exchange is facing, rather than focusing primarily on rosy updates.
ErkenBrack cited problems with the APTC reimbursements that could cost carriers millions and drive them away from Colorado’s exchange. And he said that Colorado’s systems continue to enroll some customers simultaneously in private plans and Medicaid. So far, about 3,300 people have been caught in the “simultaneous enrollment” snafu. While the customers have double coverage, it’s unclear who will pay their claims: taxpayers or private insurance companies. Furthermore, they are not allowed to receive both Medicaid and federal tax credits. Earlier this year, insurance industry representatives warned that some of the individual claims could reach $1 million each.
“Both of these are critical issues,” ErkenBrack said on Monday.
Adele Work, a manager for Connect for Health, conceded that there are problems with about 50 percent of customer records related to the tax credits.
“We have not been able to completely process all of the effectuations (customers who have signed up and paid for their health insurance),” Work acknowledged Monday. “In some cases, the carriers haven’t sent them to us. In other cases, they’ve been errored out.
“That’s causing a huge discrepancy in the amount (of money carriers) are expecting to get,” Work said.
The exchange needs to send customers tax forms early next year, correctly reporting how much they received in credits so they can report them on their 2014 tax returns. And exchange managers are supposed to account for APTC payments owed to carriers for 2014 by Jan. 15, 2015. That’s why issues over the tax credits are coming to a head now.
Dr. Mike Fallon, another board member, said insurance carriers are “our customers also and if they are not being paid tens of millions,” that’s a significant problem.
“We take this incredibly seriously. This is a big risk for us,” Work said.
Sue Birch, director of Colorado’s Medicaid programs and a non-voting board member, questioned whether the exchange should consider insuring itself in case carriers suffer losses as a result of problems accounting for tax credits.
“There’s enormous potential for liability,” Birch said.
Debra Judy, policy director for the Colorado Consumer Health Initiative, urged everyone to make the tax credits as simple and accurate for consumers as possible.
“Anything Connect for Health or others can do to make this run more smoothly is going to be important,” Judy said.
She urged consumers to report any job and salary changes to Connect for Health officials since those changes could affect their tax credits. She said it will be vital for exchange managers to give consumers proper tax forms known as 1095s.
“If 1095s are wrong or delayed, that could mean a delayed tax refund too. That tax refund is probably one fo the biggest checks many of these people get. That’s why it’s really important to get it right the first time,” Judy said.
Exchange spokesman Luke Clarke said managers will be able to properly account for the tax credits “on time” and that carriers will get the money they’re owed.
“We’re in the process of calculating who’s owed what. The carriers naturally want to know what the revenue will be,” Clarke said. “ We need to confirm who is on their book (of business).”
For some individuals, the process of getting tax credits remains frustrating and confusing.
David Scherer, a resident of South Fork, traveled more than 4 hours from the San Luis Valley to Denver to testify before board members about problems he has had getting proper tax credits this year.
Scherer said he was initially told that he would qualify for tax credits of about $311 per month. So he signed up for a Denver-based Colorado HealthOP plan that cost $324 per month. He then said he paid the HealthOP the difference of about $13 per month and thought he was covered. Scherer later was told he would only qualify for $220 per month in tax credits instead of $311. The difference may have resulted from his choice to buy a plan for coverage in Denver, rather than one for where he lives. He’s not certain now whether he has coverage for 2014.
Scherer, who is in his mid-50s, said he wanted a Denver plan because he figured the doctors were better and more affordable and he was willing to drive for care. Fortunately he hasn’t needed to visit a doctor or hospital, so he’s not on the hook for claims.
Scherer said he’s made about five trips to Denver and has spent about 100 hours trying to get coverage both for last year and this year.
He said he’s found the system very complicated. Unlike most customers, Scherer doesn’t have a phone or a computer and has tried to enroll by paper, which has complicated the process.
“It’s a huge mess,” Scherer said. “For next year, they have my application. They say they are trying to run it past Medicaid. Unfortunately, I’m in limbo for next year.”
Interim CEO Gary Drews pledged to help Scherer solve his problems.
As for the issue that most keeps him up at night, Drews said he’s concerned that customers will all try to sign up at the same time, close to the Dec. 15 deadline for January coverage or again on Feb. 15, the cutoff for 2015. If everyone visits the website or calls for help at once, the volume could paralyze IT systems or service center phone lines.
Said Drews: “That’s why we’re encouraging people to sign up now.”