Subsidy eligibility is calculated from an estimation of earnings. The subsidy is actually a tax credit that is advanced to people monthly.
Steve Cairns, a tax practitioner with nearly 100 clients on the exchange, said he's worried that most Vermonters receiving premium tax credits don't understand how they work.
"They don't know that there's a reconciliation process," Cairns said. The reconciliation process will come in April when people's estimated income is compared to actual income and any excess subsidy must be paid back. Those who are overpaying will get money back, if they file their federal income tax returns correctly.
Amelia Schlossberg, a navigator at the Community Health Centers of Burlington, said she and her colleagues work hard to make sure people who receive premium assistance understand their responsibilities, especially their obligation to report changes in income.
Cairns said he agrees that navigators are doing a good job, but in his experience, "people often hear what they want."
He predicts consumer outrage next year at tax time, and said that the reconciliation process is not a good way to pay for subsidies.
People have the option to wait until tax time to receive their credit, but in order to make coverage more affordable up front and spur enrollment, the Affordable Care Act allows people to receive a portion of the credit monthly.
Many people who enrolled in coverage this year estimated their income before filing their 2013 taxes, and without having a good sense of their income for the year. That left many estimating their 2014 income based on what they made in 2012, Cairns said.
It's especially difficult for people working part-time, seasonally or in temporary positions to make that calculation accurately, according to Cairns and several navigators.
Exacerbating the problem is evidence from a recent federal report that shows the state was unable to verify income information in some cases, and diverted resources away from verification to focus on getting people into the system during the rocky early days of enrollment.
Ongoing problems with the Vermont Health Connect website can make it difficult to report changes, or verify that a reported change has gone through. Navigators said users are not notified when a change is effective.
Call times continue to fluctuate, and can be a barrier to reporting changes, they said. Many people also don't know how to effectively communicate a problem to call center workers, and navigators will often make the call with an enrollee on the line to show them how to present the information.
State premium assistance
The state also chose to provide premium assistance beyond what is covered federally. The state premium assistance is a direct subsidy, not a tax credit, and is paid for through Vermont Medicaid.
Health coverage through Medicaid, the low-income health coverage program, also uses an income-based eligibility determination, and when the Affordable Care Act expanded the program, Vermont began using its exchange site as a way for people to enroll in the program.
People on Medicaid must also report changes in income that could affect their eligibility for the program. Eligibility is checked annually in most cases by the division of economic services within the Department of Children and Families, Lunge said.
The state can recoup overpayments on premium assistance and Medicaid, Lunge said, but she was not sure whether that was the case only in instances of fraud or if the state could do so when people had made mistakes on their application.
Cases of fraud can result in criminal or civil prosecutions, but Lunge said those happen more often on the provider side, where fraud is often more costly. She said the state would have to do a cost-benefit analysis to see if it was worth prosecuting recipient fraud.
Even in instances where people may have mistakenly entered inaccurate information on their applications, it's important for the state to hold people to account, she said.
That would be true in instances where they're receiving state assistance that their income doesn't entitle them to, Lunge said, and instances where they may not be receiving enough assistance.