Thousands of health insurance customers in North Carolina will find out next month whether their subsidies have been reduced or canceled when customers receive their December bills.
Blue Cross and Blue Shield, the state's largest insurer, said Friday that more than 5,500 policies purchased here under the Affordable Care Act are not eligible for some or all of their federal subsidies. The looming change will affect about 2 percent of Blue Cross's 258,000 ACA policies in North Carolina.
Blue Cross, acting on instructions from the federal Centers for Medicare & Medicaid Services, will adjust customer subsidies accordingly on December bills, said Blue Cross spokeswoman Ryan Vulcan. The average change has not been disclosed, but the average health insurance subsidy in North Carolina this year is $300.
Some customers could see their subsidies slashed by hundreds of dollars, making their health care coverage unaffordable. These customers purchased subsidized health insurance under the Affordable Care Act in 2014 for coverage valid through the end of the year.
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"They're going to see the loss of subsidy reflected in their next bill," Vulcan said. "For the affected customers, we will turn off their auto-draft payments and send them a new bill to reflect their revised December premium, taking into account the loss or change of subsidy."
The subsidy adjustments are part of an ongoing effort by federal officials to weed out people who bought subsidized insurance without documenting their eligibility for federal financial assistance.
About 120,000 households will experience subsidy reductions in December in the 36 states that did not create their own insurance exchange and are using the federal Marketplace, according to the Centers for Medicare & Medicaid Services, which administers the Affordable Care Act.
The reason eligibility for subsidies could not be verified is because the consumer income information does not match the tax information on file. The Centers for Medicare & Medicaid Services does not have access to the most recent IRS tax information and is reconciling incomes with dated data, which may not reflect changes in income or changes in employment.
The 120,000 households nationwide represent about 10 percent of the original 1.2 million households whose eligibility for subsidies was deemed questionable in May. Most households responded to federal requests for additional information and have resolved the discrepancy.
Customers who discover their subsidies are cut or canceled next month will be able to fix the problem by updating their online profiles, Vulcan said. They will also be able to resolve problems when they re-enroll for 2015 and enter current income and employment information, she said.
But if they remain ineligible, they may have to repay the subsidies they received this year.
About 6.7 million were enrolled for individual insurance coverage under the Affordable Care Act as of Oct. 15. In early October federal authorities disenrolled about 112,000 people nationwide, including 3,500 Blue Cross customers in North Carolina who could not document their citizenship or immigration status.
The ACA prohibits federal subsidies for undocumented immigrants.