This fall, John and Carol Burger found themselves in a frightening position with respect to health insurance. It was a Catch-22 between two government bureaucracies. And the Cave Spring couple aren’t the only ones in that boat.
John, 65, is retired from a career in hospital information systems management. Carol, 60, retired from Carilion Clinic in September 2019 after suffering from cancer and a stroke. Until then she worked in Carilion’s graduate education department.
Their health insurance was through Carol’s job, and they lost the coverage after she retired in 2019.
That fall, John (then 64) signed them up for the Affordable Care Act through the federal Health Insurance Marketplace. And because Carol had missed months of work last year, their 2019 income was low. Because of that, they qualified for valuable tax credits under the ACA.
“The credits did indeed make it affordable,” John told me. So far, so good.
When John turned 65 this year, he signed up for Medicare. But Carol still needed coverage through the ACA. The problem arose when John tried to renew her for 2021.
Because they had signed up for the ACA before 2019 was over, John estimated their 2019 income during the application process. That’s what made them eligible for the tax credits. Then early this past April, he filed their 2019 federal tax return by mail.
But the IRS, which spent months earlier this year processing COVID-19 stimulus checks, hasn’t yet processed the Burgers’ 2019 return. And that became a problem in Carol’s ACA renewal process this fall.
The Burgers discovered they couldn’t qualify for the tax credits unless they reconciled their estimated 2019 income with their actual, reported-to-the-IRS income. (People do that by checking a box on the application form.) But because the IRS hasn’t yet processed their return, reconciliation hasn’t occur. Meanwhile, the deadline for renewal is Dec. 15.
Without the credits, the Burgers couldn’t afford Carol’s health care coverage. That’s a bad position for any 60-year-old, but especially bad for someone with her pre-existing conditions.
In an effort to get their tax return processed, John tried to contact the IRS. As many others have discovered this year, that was fruitless.
John had similar results when trying to contact the federal Health Insurance Marketplace. At least there, a human being answered the phone. But that person placed him on hold. And after 20 minutes, the line disconnected.
So in October, John reached out to the office of Rep. Ben Cline, R-Botetourt. A Cline representative, Kjersten Croke, tried to troubleshoot the issue with the IRS. But after a couple of weeks with no resolution, John contacted me.
“Boy, could I use your help,” he said in a Nov. 4 voicemail. “The IRS is ignoring us. They haven’t gotten around to processing our return this year, despite the fact that I mailed it April 2, from Roanoke, at 3:42 in the afternoon.”
When we spoke, he noted the problem was even more acute, because the deadline for Carol to renew her ACA insurance is Dec. 15. I suggested he contact the IRS Taxpayer Advocate in Richmond. I also referred the issue to the office of Sen. Mark Warner.
Soon, John got a phone call from Chris Monioudis, casework director in Warner’s Roanoke office. Later, John heard from someone else who works for the Health Insurance Marketplace.
That person informed John that he should enroll Carol in the ACA anyway, and check the box on the online enrollment stating their 2019 income estimate has been reconciled with their 2019 tax return — even though it hasn’t.
The employee added that the marketplace would regularly update its files against IRS tax return data. Eventually, the system would right itself, the worker said. In the meantime, Carol would maintain coverage and the couple would be eligible to tax credits that kept it affordable.
Croke, meanwhile, continued working on the Burgers’ issue. Ultimately, she was able to get a similar answer in writing from the Centers for Medicare and Medicaid Services. She forwarded that to the Burgers.
“At this moment, consumers should attest on their 2021 Marketplace application by checking the box that says ‘Yes, I reconciled premium tax credits for past years.’ This will allow them to enroll in 2021 coverage with [tax credits] (if still eligible based on income) without delay,” the email said.
“The Marketplace will continue to run the data calls/checks to IRS until all 2019 tax returns have been processed.”
Considering that 8.4 million people signed up for the ACA in 2019, and at least 8.3 million are expected to renew this year, the issue will probably snag others, too. And many may not even realize it yet, said Rachel Cohen, a spokeswoman for Warner.
Open enrollment for the ACA began Nov. 1. But “a lot of people don’t get serious about the process until later,” Cohen said. “We suspect it’s going to be more common” as the Dec. 15 deadline draws near.
So consider yourself forewarned about this potential Catch-22.
And if you have other issues signing up for the ACA, staffers in local congressional offices are able and willing to help.
Bravo for the assistance they rendered the Burgers.