I skipped legal ease class in kindergarten. Can someone please interpret the bolded item below. Does this mean that a person who claimed projected 110% FPL income, and actually comes in at 90% FPL, will they have to pay back the subsidies or not? This is for non medicaid expansion states only. The article has links to other references.
The Subsidy Cliff: Incentives For Increasing Projected Income To Qualify For Exchange Subsidies – Health Affairs Blog
During the first round of open enrollment under the ACA, millions of Americans learned whether they qualify for subsidized health insurance coverage through the law’s exchanges. At that time, one significant feature of the law became especially apparent: the dramatic cutoff of premium assistance for individuals who do not qualify for Medicaid in their state, but also earn too little to qualify for subsidies through the exchanges.
For example, if, during enrollment, a sixty year-old Miami man projected that he would earn $11,500 in 2014, he could purchase a bronze plan using a full subsidy so there would be no cost to him in premiums. But if the same man projected earning just $500 less, $11,000, he would no longer qualify for any subsidy at all and the same coverage would require him to pay the full $6,573 premium.
Here is how the coverage gap works: Under the ACA, people earning below the key threshold of 100 percent of the federal poverty level (FPL) do not qualify for any premium subsidies through the exchanges; the law was written to provide them with Medicaid coverage instead. In reality, however, Florida and 23 other states chose not to expand Medicaid under the ACA, creating a gap into which roughly five million people with annual incomes less than 100 percent FPL ($11,490 for an individual or $23,550 for a family of four) will likely fall.
Discussions of the coverage gap typically overlook the strong incentives that these uninsured individuals may have to modify their incomes in order to qualify for subsidies. Such behavior is a particularly important possibility because the US treasury will not force exchange enrollees to pay back subsidies if their projected income at enrollment exceeds the Federal poverty level but their year-end taxable income falls below it.
The Subsidy Cliff: Incentives For Increasing Projected Income To Qualify For Exchange Subsidies – Health Affairs Blog
During the first round of open enrollment under the ACA, millions of Americans learned whether they qualify for subsidized health insurance coverage through the law’s exchanges. At that time, one significant feature of the law became especially apparent: the dramatic cutoff of premium assistance for individuals who do not qualify for Medicaid in their state, but also earn too little to qualify for subsidies through the exchanges.
For example, if, during enrollment, a sixty year-old Miami man projected that he would earn $11,500 in 2014, he could purchase a bronze plan using a full subsidy so there would be no cost to him in premiums. But if the same man projected earning just $500 less, $11,000, he would no longer qualify for any subsidy at all and the same coverage would require him to pay the full $6,573 premium.
Here is how the coverage gap works: Under the ACA, people earning below the key threshold of 100 percent of the federal poverty level (FPL) do not qualify for any premium subsidies through the exchanges; the law was written to provide them with Medicaid coverage instead. In reality, however, Florida and 23 other states chose not to expand Medicaid under the ACA, creating a gap into which roughly five million people with annual incomes less than 100 percent FPL ($11,490 for an individual or $23,550 for a family of four) will likely fall.
Discussions of the coverage gap typically overlook the strong incentives that these uninsured individuals may have to modify their incomes in order to qualify for subsidies. Such behavior is a particularly important possibility because the US treasury will not force exchange enrollees to pay back subsidies if their projected income at enrollment exceeds the Federal poverty level but their year-end taxable income falls below it.
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