Exchange Subsidy "Clawback"

[Yagents]

You have got to be kidding me. This is the first time I've heard of this clawback provision. If I'm getting this correctly, they decided to make the wealthier insureds to pay the wealthier doctors. These kind of things will make many people buy outside the exchange just to avoid the uncertainty of dealing with the government.

"Senate leaders have reached a tentative, one-year deal on the Medicare 'doc-fix,' sources close to the negotiations say. The deal pays for the must-pass patch to prevent a deep cut in Medicare doctors' payments with changes in the tax subsidy program that some consumers will use after 2014 to buy health insurance on the new exchanges

CQ Today reports, "Republican aides said the $19.2 billion proposal, which leaders tentatively plan to bring to the Senate floor Wednesday, would be paid for by changing how the government recoups overpayments of consumer subsidies." Notably, the "new health care law (PL 111-148, PL 111-152) will provide tax credits to people with incomes between 100 percent and 400 percent of the federal poverty level to help them buy health insurance in state-run markets, beginning in 2014. If a person misstates his income or if it changes, the subsidy recipient is supposed to repay part of the subsidy, up to $200 for an individual or $400 for a couple." This "agreement would raise those limits, although details were unavailable Monday

 

[VolAgent]

Umm, why shouldn't you be required to repay money to which you were not entitled? I'm not getting into the merits of the subsidy or Obamacare, but if you received a subsidy and under its terms you were not entitled to it, then you should repay it, in full.

 

[davidleekline]

I'm not sure what I am missing here but the implication is that there was no or a more limited recoupment plan in place now, which means lying about your income is somehow okay today. Hopefully there is more to it.

 

[somarco]

No different from the anti-rescission clause. Loosely translated, it is OK to lie to the carrier on your app. If they find out you lied they can still cancel but not retroactively. You still get to hose them on claims paid up until the cancellation date.

Post issue underwriting investigations typically take at least 30 days and not unusual to take 60+. In the interim get as many treatments in as possible before the carrier pulls the plug on you.

 

[Yagents]

Umm, why shouldn't you be required to repay money to which you were not entitled? I'm not getting into the merits of the subsidy or Obamacare, but if you received a subsidy and under its terms you were not entitled to it, then you should repay it, in full.

I'm all for paying what is due. But, for everyone who plans on growing their income, or has unstable/volatile income...the uncertainty won't allow anyone to plan accordingly or know where they stand. Umm.....for every dollar more I make, I lose 25 cents in subsidy. I wonder if my income drops, will they give me additional subsidies? It's a race to the bottom...sad

 

[VolAgent]

I'm all for paying what is due. But, for everyone who plans on growing their income, or has unstable/volatile income...the uncertainty won't allow anyone to plan accordingly or know where they stand. Umm.....for every dollar more I make, I lose 25 cents in subsidy. I wonder if my income drops, will they give me additional subsidies? It's a race to the bottom...sad

No one ever said life was easy. I understand your point, but the fact is, the person wasn't entitled to the subsidy and should have to repay it. Otherwise, everyone will understate their income to get the subsidy, and only repay a portion of it.

The whole thing is messed up from step one. There shouldn't be a subsidy to begin with, but its there and must be dealt with.

 

[Yagents]

To take it a step further, and this comes from my pipe dream world....let's assume agents will be part of, and compensated through the exchange. Any comp we MAY receive will NOT be based on the subsidy portion. If that's the case, our comp could also be "clawed" back when any of our exchange clients receive a clawback.

 

[VolAgent]

To take it a step further, and this comes from my pipe dream world....let's assume agents will be part of, and compensated through the exchange. Any comp we MAY receive will NOT be based on the subsidy portion. If that's the case, our comp could also be "clawed" back when any of our exchange clients receive a clawback.

Actually, based on what you wrote, the comp should increase. If the comp was based on the unsubsidized portion, if you increase the unsubsidized portion the comp should increase. Now, that won't happen, the clawback will occur, but no extra money to the agent.

 

[somarco]

For some, this is no different than the mandate for employers with 50+ employees to provide health insurance.

If you have 49, no mandate. Hire 1 more and you are subject to the mandate.

How many employers do you believe will resist the urge to hire extra staff if it means they have to provide health insurance?

Slackers will do the same on health insurance. If they can get it free or highly subsidized they will do what they can to hide income to stay on the taxpayer tit.

 

[AllenChicago]

The subsidy aspect of the exchange is going to be run by the U.S. Treasury. The IRS is a part of the US Treasury. Why should there even be a "Clawback" provision? The IRS knows if the prior year income reported by a health insurance applicant is accurate or not. It only takes a couple minutes for the computer to verify it in real-time at application time.

It's going to be FUN watching this whole Exchange thing crash and burn in 2015/2016!

-AC