Facing Higher Penalties, Uninsured Crowd Enrollment Centers Right Up to Deadline

As the clock struck midnight last night, the second open enrollment deadline under the Affordable Care Act (ACA) came and went. This year, however, those without insurance seemed to understand the stakes were higher, as enrollment centers around the country filled with last-minute shoppers.

The penalty for not having insurance under the individual mandate rises this year, from $180 to $325, or 2% of income, whichever is higher. The amount will rise to $695 or 2.5% of income in 2016.

Some consumers who filled enrollment centers to meet with navigators compared their procrastination with the April 15 tax deadline—they know they have to get it done, but they put it off until the last minute. Depending on which state they were located in, some navigators helped consumers determine if they were eligible for financial subsidies, which have helped millions pay for premiums and cost-sharing.

According to data released Friday from CMS, through February 11, 2015, more than 10 million Americans had signed up or been automatically renewed for coverage through state or federal exchanges. Financial assistance is clearly a big part of the enrollment equation, with 87% of consumers qualifying for tax credits during the first 2 months of open enrollment. The average monthly tax credit for those who qualify was $268 in the 37 states using the federal exchange through January 30, 2015.

That all could change, however. Consumer advocates and the Obama Administration are keeping an eye on those numbers oral arguments approach in King v. Burwell, the case that could upend healthcare affordability for this group. Plaintiffs who brought that case will ask the US Supreme Court to eliminate financial assistance for all healthcare consumers living in states that did not set up their own exchanges. Most observers believe the ACA would cease to effectively function without the subsidies.

Open enrollment for 2015 lacked the chaos of the first year. CMS officials have touted the improved consumer experience on the HealthCare.gov website, including the huge decline in the number of screens users needed to enroll and reduced wait times for call centers. CMS officials, as well as those in California, where access to care and choice of providers have been the subject of complaints, have also pointed to increased competition this year compared with the first year of coverage under ACA.

However, reports of price dislocations, enrollment difficulties and “back end” issues with insurers have not completely ebbed. And the arrival of the 2015 tax filing season has brought the first reports of consumers who underestimated their 2014 income and must now repay a portion of last year’s premium financial subsidy.

A different tax issue has emerged in states where governors and legislators have declined to expand Medicaid. In those states, some consumers who fall in the coverage gap—those who earn too much for Medicaid but not enough to afford coverage on the exchanges—are seeking exemptions to the tax penalty for not having coverage.

These consumers, often aided by Enroll America, the group that was spun off from the remnants of the Obama 2012 re-election campaign, assert on exemption forms that they would have been eligible for coverage under Medicaid expansion; however, they live in states like Texas or Louisiana, which did not extend coverage to those between 100% and 138% of the federal poverty level.

According to published reports, the US Treasury estimates between 10% and 20% of taxpayers nationwide will seek such an exemption on their 2014 tax return.

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