The Richmond Times-Dispatch penned a misleading editorial to attack the Affordable Care Act (ACA) by incorrectly claiming income-based tax credits would not be verified, that caps on co-payments have been eliminated, and that the ACA will leave future Americans uninsured.
The October 23 editorial used the slow start of the exchange websites as a launching point to discount the entire law and its provisions as a failure. The editorial pushed several claims about the law including that it drops proof-of-eligibility requirements and it will leave millions of people uninsured in the next decade (emphasis added):
[The ACA] has failed so miserably that President Obama took to the airwaves to emphasize what a wonderful success it was, despite the website issues for which he offered "no excuses" -- and took no responsibility.
Besides, he said, "the Affordable Care Act is not just a website. It's much more." Indeed it is -- and there have been many more problems than just online technical roadblocks. The administration has delayed the employer insurance mandate for a year. It has dropped proof-of-eligibility requirements for exchange subsidies. And it has jettisoned caps on out-of-pocket expenses such as copayments and deductibles. Democrats and Republicans agree that the tax on medical devices should be repealed.
The ACA is not just a website -- and the glitches are not just web-related. Even if the law works exactly according to plan, a decade from now 31 million Americans will remain uninsured, according to the Congressional Budget Office. If that is success, be afraid of what failure could look like.
The Times-Dispatch's claim that the administration had "dropped proof-of-eligibility requirements" for individuals applying for tax credits to use towards the price of health care coverage bought on the exchanges is patently untrue. In fact, a strengthened income verification measure was part of the minimal concessions given to the Republicans to reopen the government after they held the entire law hostage leading to the government shutdown.
Furthermore, according to CNN Money the current verification methods will allow the IRS to recoup any over-payments from falsified information, meaning "anyone who might get a bigger subsidy than they are eligible for will have to pay back the difference to the IRS." According to CNN Money:
The final calculation of a subsidy's size will be done after the fact by the IRS.
"Your actual tax credit will be calculated based on your actual income that next April [when you file your federal tax return]," [Kaiser Family Foundation Senior Vice President Larry] Levitt explained.
Bottom line: Anyone who might get a bigger subsidy than they're eligible for will have to pay back the difference to the IRS.
And they may owe a penalty, too, since they must attest when applying for subsidies that they are not filing false information.
"If you report your income incorrectly, it will catch up with you because there's a reconciliation of these tax subsidies on your tax return. Come tax time you could see an enormous bill," said Linda Blumberg, a senior fellow at the Urban Institute's Health Policy Center.
The Times-Dispatch editorial also claimed that the administration had "jettisoned" out-of-pocket caps or limits placed on deductibles and co-payments. The editorial frames this as a permanent provision to the ACA. However, in reality, there has been a one-year delay in the implementation of the caps to better allow insurance companies to coordinate and fine tune logistical details so that caps can be calculated accurately. According to The New York Times:
The health law, signed more than three years ago by Mr. Obama, clearly established a single overall limit on out-of-pocket costs for each individual or family. But federal officials said that many insurers and employers needed more time to comply because they used separate companies to help administer major medical coverage and drug benefits, with separate limits on out-of-pocket costs.
In many cases, the companies have separate computer systems that cannot communicate with one another.
A senior administration official, speaking on condition of anonymity to discuss internal deliberations, said: "We knew this was an important issue. We had to balance the interests of consumers with the concerns of health plan sponsors and carriers, which told us that their computer systems were not set up to aggregate all of a person's out-of-pocket costs. They asked for more time to comply."
Caps on out-of-pocket spending remain an important part of the ACA and will save American families billions of dollars each year. In 2011 alone it was estimated that families spent $24.7 billion more than the ACA's cap threshold.
Finally, the Times-Dispatch made the inaccurate claim that the ACA, by design, will leave 31 million Americans uninsured. The editorial states that these individuals would remain uninsured "even if the law works exactly according to plan," suggesting the health care reform measure never intended this group to gain coverage. This analysis is flawed for two reasons. First, the law assumed states would participate in the Medicaid program given the low cost and high benefit structure of expansion, which, due to Republican obstructionism has not happened, potentially leaving 6 to 7 million people uninsured. However, a second flaw in their argument is that many of the remaining uninsured people are undocumented immigrants who were barred from gaining coverage thanks to strong Republican opposition and the lack of Republican support on current immigration reform measures.