On June 5, 2020, executive directors from 14 state-based insurance marketplaces (SBM) sent a letter to Congressional leaders voicing support for federal efforts to reinforce insurance markets during the COVID-19 pandemic.
As the coronavirus sweeps across the country, the state-based marketplaces have stepped up to provide access to critical health insurance coverage – especially to the millions of uninsured individuals and those newly insured because of job loss. Since opening up special enrollment periods in response to the pandemic, hundreds of thousands of individuals have sought coverage through either the private market or state Medicaid programs.
But challenges remain, particularly how effectively marketplaces can cover their populations given the high costs of insurance that prohibit many from affording coverage. In their letter, SBM directors recommend a federal reinsurance program and enhanced insurance subsidies, which have a proven track record of reducing costs and increasing access to coverage.
The mission of the SBMs, which exercise more control over their marketplaces than states that use the federal marketplace, is to provide access to affordable, quality insurance plans to individuals. SBMs have a long history of leveraging their flexibility to improve consumer experiences, invest in outreach and marketing to draw in the uninsured, and to develop policies to lower their health plans costs.
The letter also calls for the waiver of penalties on individuals who inaccurately estimated their future income when assessing their eligibility for tax subsidies with which to purchase coverage through the insurance marketplaces. The likely volatility of consumer income during this pandemic-ridden economy puts consumers at risk for tax liability if they under-estimate their projected income and inadvertently receive excess tax credits.
This issue may be exacerbated by discrepancies in how new unemployment benefits included in the Coronavirus Aid, Relief, and Economic Security Act (CARES) are counted toward eligibility for Medicaid benefits versus marketplace subsidies. In a separate letter sent to the US Treasury Department, SBMs elaborate on the need for maximum flexibility on any marketplace-related tax liability.
The letters are signed by SBM directors from California, Colorado, Connecticut, Washington, DC, Maryland, Massachusetts, Minnesota, Nevada, New Jersey, Oregon, Pennsylvania, Rhode Island, Vermont, and Washington State.
View the letter to Congressional leaders here.
View the letter to the Treasury here.
Read the May 11, 2020 NASHP blog: State-Based Marketplaces Lead in Increasing Access to Coverage during COVID-19
