Ask Emily is a biweekly column by Emily Bazar of the CHCF Center for Health Reporting, answering questions about the Affordable Care Act. Read all of her columns at sacbee.com/askemily.
In my previous column, I explained that you become ineligible for Covered California’s tax credits when you turn 65 and enroll in Medicare. You will owe money to the government if you keep getting the credits after your Medicare begins.
So I tried to offer a simple solution: Cancel your Covered California plan.
Unfortunately, in the past two weeks, I have heard from Californians and insurance agents across the state who have tried mightily – and failed – to cancel their plans. Instead, the premium bills just keep coming.
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Q: In reference to your previous column about Medicare, how do you propose to get Covered California to cancel anyone? We have been trying since August and are exasperated. … My insurer keeps billing us. This is a NIGHTMARE!
A: Chris Woolley and her husband purchased a Kaiser policy through Covered California, the state’s health insurance exchange. Based on their income, they qualified for $938 in tax credits each month to reduce their premium.
The San Fernando Valley couple both turned 65 this year and enrolled in Medicare. Woolley called Covered California in August to cancel the plan effective Sept. 1 for her and Oct. 1 for her husband. (The different dates reflect their different birthdays and Medicare eligibility dates.)
Woolley says she was promised that the plan would be canceled, but the bills continued. She called Kaiser, which informed her that it did not have the authority to cancel the couple’s plan without Covered California’s permission.
Woolley made more calls to Covered California and received more assurances. She wrote a letter that was never acknowledged.
All for naught. She recently received the bill for their December premium.
“I’m in a Catch-22. Covered California says they canceled the plan and Kaiser says to call Covered California,” she says. “My big fear is the tax credits. They’re saying people can owe hundreds or thousands.”
That would be my fear, too, especially if my tax credits amounted to nearly $1,000 each month.
If the federal government determines that you received more tax credits than you were eligible for, you will owe a repayment. But the government usually sends the credits directly to insurers, bypassing consumers altogether – until the amount has to be reconciled at tax time.
Nicole Kasabian Evans of the California Association of Health Plans confirms that Covered California controls eligibility and cancellation of its health plans. That means plans must wait for direction from the agency before terminating coverage, she says. (This does not apply when consumers stop paying their premiums. In those cases, plans can cancel after a grace period of 90 days, she says.)
It would be one thing if Woolleys’ story were unique. It’s not. When she spoke to the Kaiser representative, she was told that many other consumers are in the same boat.
It’s not clear how many people this affects, but the pool of potential victims is large. Those aged 55 to 64 make up the largest group of Covered California enrollees who were eligible for tax credits in Obamacare’s first open-enrollment period, comprising more than 300,000 people.
Douglas Veale, a Sacramento insurance agent, also heard that this problem is widespread when he contacted Covered California on behalf of a client who recently turned 65. He and his client have been trying to cancel for more than a month, both online and by phone, but “terminating coverage with Covered California has proven impossible,” Veale says.
A Covered California phone rep told him that the cancellation challenges stem from a “programming problem” with the agency’s troubled $454 million computer system and added that “this is a significant problem” affecting many consumers, he says.
I asked Covered California to explain these problems and provide advice for consumers. I asked what kind of impact this could have on someone’s taxes if he/she tries to cancel a plan on time, but keeps getting billed.
Here’s the agency’s response:
“Any consumers wishing to terminate their coverage should contact the Covered California service center for assistance to ensure their coverage is terminated consistent with their requested date of termination.”
How helpful. That’s exactly what these consumers tried to do.
I have some advice, but I’m sorry to say it will require more of your time:
▪ Follow Chris Woolley’s example and keep track of who you speak with when you call Covered California and your insurer. Get names and ask for reference numbers. In short, create a paper trail in case you’re asked to repay tax credits that you don’t believe you owe.
▪ Elaine Wong Eakin of California Health Advocates recommends filing a complaint with Covered California. You can find the complaint form on the Covered California website (www.CoveredCA.com/contact/) or file your complaint by phone at (800) 300-1506.
If you need legal help, she says, reach out to the Health Consumer Alliance at (888) 804-3536.
▪ You also can request a Covered California eligibility hearing, suggests the Western Center on Law & Poverty’s Jen Flory.
“The hearings are really for any eligibility decision, including cancellation,” she says.
Questions for Emily: AskEmily@usc.edu
Click here to find previous Ask Emily columns.
The CHCF Center for Health Reporting partners with news organizations to cover California health policy. Located at the USC Annenberg School for Communication and Journalism, it is funded by the nonpartisan California HealthCare Foundation.