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Massive Cost-Sharing Reductions Ignored in the Exchange

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More than 2 million public exchange enrollees eligible for cost-sharing reductions are not receiving the subsides because they selected a non-qualifying plan, a recent analysis from consultancy Avalere has found. The oversight could have been avoided with better decision-making tools and the help of trusted advisers, benefit experts agree.

These cost-sharing reductions are in addition to the more publicized tax credits.  The cost-sharing reduction only applies to plans in the silver metal level status and are for enrollees with incomes between 100% and 250% of the federal poverty level ($11,770-$29,425.)

Washington-based Avalere found that of the 8.1 million individuals who enrolled in exchanges in 2015 who earn incomes that are eligible for the cost-sharing reductions, just 5.9 million are actually receiving them. That leaves 2.2 million consumers potentially paying more out of pocket than the Affordable Care Act intended because they selected a plan that does not qualify, the consultancy notes.

Most likely, consumers are picking plans on exchanges based on premiums, rather than out-of-pocket costs, says Avalere CEO Dan Mendelson. “As a result, some patients may be paying more than they need to for care,” he says. “While cost-sharing reductions can help reduce what patients pay when they visit a doctor or hospital, some consumers may be unaware of the potential benefits.”

B. Ronnell Nolan, CEO of agent lobbying group Health Agents for America, says that the fact this money is not being accessed is a “thorn in [her] side” and a result of Americans not getting access to experts agents and brokers.

“Instead, they are meeting with navigators and [certified application counselors] who are not trained properly and being sold, not enrolled [in] the cheapest plan,” she says. “Upon arrival at the hospital, the hospital is going to ask these people who are on a fixed budget for a huge deductible before the procedure and they are going to be blindsided.”

“It really hurts my heart, a law passed to help those that do not have insurance is simply not doing that,” she adds.

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