Maintaining Access to Affordable Insurance Through Life's Changes

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<p>At least 34 million people will gain new health insurance coverage once the Affordable Care Act is fully implemented. To ensure that income fluctuations, job transitions, and other life changes do not create major disruptions in this coverage or in families' financial responsibilities, a new Commonwealth Fund <a href="/publications/issue-briefs/2011/may/realizing-health-reforms-potential-maintaining-coverage">issue brief</a> presents policy options to make it simpler for people to sign up for, pay for, and keep their coverage despite changes in circumstances. Such vigilance, the authors say, will also help governments reduce their administrative costs.</p>
<p>Because the premium tax credits provided by the health reform law are based on income reported on prior-year tax returns, people with income changes might receive too much or too little subsidy, and then face an unexpected bill or, conversely, become eligible for a greater subsidy. Recent legislation increased the amount that people would have to pay back if their income rises above the level they reported. Income-based shifts in coverage can also affect people near the Medicaid eligibility threshold, as well as those moving between the individual and small-business insurance exchanges.</p>
<p>To reduce the potential for instability in coverage, the authors recommend:</p>
<li>making coverage choices valid for a full year; </li>
<li>requiring the IRS to send alerts to people whose income has changed over the course of the year; </li>
<li>coordinating the systems that determine people's eligibility for public insurance programs and premium subsidies; and </li>
<li>combining small-business and individual insurance exchanges into a single exchange, to reduce administrative costs and make it easier for former small business workers to enroll in an individual health plan.</li>