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Ways and Means Members Request Information on Exchanges’ Income Verification

November 20, 2013

Washington, DC – Ways and Means Committee Republicans today sent a letter to Health and Human Services (HHS) Secretary Kathleen Sebelius regarding problems with the income verification system in the Exchanges.

Recent reports have documented the Exchanges miscalculating eligibility for federal tax credits, and therefore misleading consumers as to how much their plan will cost them, as well as duplicate enrollments and applications with missing data.  As the Members write, “the law requires you certify to Congress that a system is in place that can accurately verify eligibility before the tax credits are made available.  We do not believe you can make that certification today.  We also believe it is time to acknowledge that we really do not know if you will be able to do so before January 1.”

The letter cites one specific example of the income verification problem, “Jessica Sanford of Washington State, who President Obama cited as an early success story for the Exchanges, is a prime example.  The Exchange miscalculated her eligibility for subsidies, which changed the cost of her insurance from the original quote of $198 per month to $324 per month for a plan with a higher deductible.  If the tax credit and cost sharing eligibility mistakes are not discovered, many individuals will receive credits and subsidies for which they are not eligible.  Once reconciled with their tax filing, most of these individuals will be surprised to learn they are required to payback the mistaken subsidy.”  

The Members requested the following information by November 27, 2013:

1. Given that, to date, you have not forwarded the required certification, am I correct in assuming that you do not believe you could make that certification today?  

2. If you are unable to make the required certification, on what date will you notify Congress and the American people?

3. What contingency plans are you making to mitigate the consequences of the inability to complete a working verification system?

4. What is the current error rate in Federal Exchanges with regard to income verification?

5. What is the current error rate in State Exchanges with regard to income verification?

6. What is the current error rate in insurer direct enrollments with regard to income verification?