CMS and IRS will keep tax subsidies for ACA consumers who failed to file tax returns
States should encourage their immigrant populations to access public health benefits, since the public charge rule is no longer in effect.
Photo: Marko Geber/Getty Images
Consumers who bought health insurance through the federal or state marketplaces and who failed to file tax returns and reconcile their premium tax credits, are being given a pass on future tax credits.
For plan years 2021 and 2022, the Centers for Medicare and Medicaid Services will not remove subsidies that help consumers pay for their health coverage if they did not file tax returns and reconcile a previous year's premium tax credit. This also applies for consumers who reconciled their tax credits but whose tax returns have not yet been processed by the IRS.
The guidance is applicable for federally-facilitated marketplaces that use the HealthCare.gov platform, as well as the state-based marketplaces.
CMS said it is doing this in coordination with the Internal Revenue Service.
Consumers are generally still required to file and reconcile premium tax credits with the IRS for their federal income tax returns, CMS said.
WHY THIS MATTERS
Most consumers getting health coverage through the Affordable Care Act get financial subsidies to pay for it through tax credits.
The CMS guidance issued Friday limits the removal of tax credits so that consumers will continue to be able to afford their health coverage. This is being done in response to the COVID-19 pandemic.
More than two million people have enrolled in the Biden Administration's special enrollment period for ACA coverage that runs from February 15 to August 15.
For hospitals, this translates into less uncompensated care.
A recent JAMA study showed medical debt has risen to $140 billion and that unpaid medical bills are a major source of debt for Americans. A JAMA editorial examines medical debt as one of the social determinants of health.
THE LARGER TREND
President Joe Biden, who was vice president when President Barack Obama signed the ACA into law, has been beefing up ACA coverage support, in contrast to his predecessor, President Donald Trump.
The Biden Administration is also encouraging Medicaid and Children's Health insurance Program coverage for immigrants and has issued a bulletin to states that the 2019 Public Charge Rule is no longer in effect.
The public charge rule, which was first introduced in 1882, was designed to identify people who would become dependent on government benefits as their main source of support. The government could deny admission or deny residency into the United States for anyone identified as a "public charge."
CMS has reaffirmed that the 2019 Public Charge Final Rule is no longer in effect. The Department of Homeland Security will no longer consider a person's receipt of Medicaid (except Medicaid for long-term institutionalization) as a part of a public charge determination when deciding immigration status.
States should encourage their eligible immigrant populations to access public benefits related to health and housing, since accessing these benefits will usually have no bearing on anyone's immigration status, CMS said.
Twitter: @SusanJMorse
Email the writer: susan.morse@himssmedia.com
