Health Care

GOP lawmaker to grill CMS chief on surprise ObamaCare tax bills

A GOP member of the House Oversight Committee is preparing to grill the Obama administration on the surprise tax bills that will hit some ObamaCare enrollees who do not choose a different health plan by Feb. 15.

Rep. Mark Meadows (R-N.C.) plans to bring up the issue with Centers for Medicare and Medicaid Services (CMS) Administrator Marilyn Tavenner when she testifies before the panel on Tuesday.

{mosads}The hearing is likely to focus on witness Jonathan Gruber, an ObamaCare consultant now infamous for his comment that the “stupidity of the American voter” helped the healthcare law to pass.

But Meadows says he’s more interested in hearing from Tavenner on subtle changes in how ObamaCare subsidies are calculated that will leave some enrollees owing money to the IRS.

“The significance of this is troubling to me when you realize what CMS is doing and not doing to inform people that they will get a tax bill [if they do not actively re-enroll],” he said in an interview Monday.

Meadows’s office estimated that there is the potential for about 3.8 million people to get a tax bill related to their health insurance coverage if they do not pick a different plan for next year.

The bills might come because the “benchmark” plan that determines subsidies in each region — and which attracted most enrollees in 2014 — is set to change in many areas of the country.

People in the old benchmark plans who do not re-enroll in new ones will pay the difference in subsidy costs dollar-for-dollar if the new benchmark is cheaper.

It’s a complex calculation that could leave many people paying more, even if their premiums do not rise substantially.

Federal health officials are urging enrollees to return to the exchanges as a result in case they could get a better deal.

Meadows said he plans to introduce legislation that would require officials at either the CMS or the IRS to notify individual consumers that they could owe money later because their subsidy is changing. The goal would be to push enrollees back into the marketplaces to shop.

“There’s a difference between telling people ‘you might get a better premium price’ — which is true and everyone should do that — and telling people they’re about to get the wrong subsidy if they don’t re-enroll,” Meadows said.

The 3.8 million figure comes from data at Department of Health and Human Services and the McKinsey Center for U.S. Health System Reform, and estimates how many subsidized enrollees in benchmark plans live in regions where the benchmark is changing, Meadows said.

The CMS acknowledged the problem in Nov. 21 regulations that proposed to shift ObamaCare enrollees into cheaper plans in 2016, rather than automatically renew their current coverage.

Enrollees would be able to choose the option of being shifted to a different plan when they first enter the exchange, regulators said.

“This alternative enrollment hierarchy could be triggered if the enrollee’s current plan’s premium increased from the prior year, or increased relative to the premium of other similar plans by more than a threshold amount,” the regulation stated.

“As is the case under the existing approach, a consumer would retain the option to take action to enroll in a different plan during open enrollment if he or she wished to do so.”

A spokesman for the CMS pointed to the proposal but did not provide further comment.


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