Government Probe Portends Obamacare Eligibility Chaos
According to a recent New York Times report, the Obama Administration is probing hundreds of thousands of Obamacare enrollees regarding their eligibility for government premium subsidies. The Times reports that, Serco, a company hired by the government to validate enrollment information, has determined that two million individuals who enrolled in Obamacare through public exchanges provided personal data that conflicts with government records. That would be approximately a quarter of all Obamacare enrollees.
While it isn't yet clear how many enrollees will have their subsidies invalidated, the implications of this probe could spell chaos for both patients and providers. In the first instance, one would expect that individuals found to be ineligible for their subsidies would be asked to make back payments on their premiums. That would likely cause a large number of enrollees to lose their coverage, either because they can't or don't want to pay unsubsidized premiums. It's possible that the termination of these enrollees' coverage would be retroactive (especially if they refuse to pay back subsidies they've already received).
In the meantime, these Obamacare enrollees are presently going to doctors and receiving medical care. Depending on when their coverage terminates, there is likely to be some confusion over whether patients were or were not insured at the time they received care. In the private insurance market, these "member eligibility" issues often result in insurers retroactively denying coverage for services, and demanding that providers repay any insurance benefits that were paid out. The provider then faces the challenge of seeking repayment from the patient.
Depending on the scope and consequences of the government's probe, there are likely to be a raft of coverage terminations in its wake. If these terminations play out the way they typically do outside the context of Obamacare, we should expect widespread eligibility disputes and, potentially, recoupments from providers.