- Associated Press - Thursday, October 16, 2014

PORTLAND, Ore. (AP) - Officials with Oregon’s troubled health insurance exchange say thousands of Oregonians could owe money to the federal government because they were given tax credits that were too large - not hundreds as previously reported.

According to Cover Oregon’s in-house analysis, 12,772 tax-paying households are likely affected by the error. Their tax error ranges from $1 to more than $100 per month. The average error is $8.41 per month.

Previously, Cover Oregon reported that only 775 households would owe tax credit money.

About 45,000 policies, or 80 percent of those who enrolled in private coverage via Cover Oregon, received tax credits, officials said.

The errors are due to Cover Oregon using the wrong formula to calculate credits for individuals and families with incomes between 139 and 400 percent of the federal poverty line.

Officials also point to an independent analysis by ECONorthwest, a Portland economic consulting firm, which found a smaller number of errors. But that analysis is incomplete, they say, because the consultant rejected some flawed data.

ECONorthwest found 7,490 policies are affected by the error. Among those policies with the error, the tax credit impact ranges from $1 to $72 per month, the analysis shows. The average amount by which a policy’s tax credit would be affected is $5.46 per month.

Cover Oregon Executive Director Aaron Patnode said he has asked ECONorthwest to do another analysis to rectify some of the data discrepancies. Until it gets a more accurate analysis, the exchange won’t contact people affected by the error.

Officials say the error is limited to those who purchased nonstandard plans that cover alternative care beyond the 10 essential health benefits mandated under the Affordable Care Act - such as acupuncture and chiropractic care.

Most plans contain only the 10 essential benefits, such as hospitalization, emergency or preventive services.

Of the 102 plans offered in Oregon, 67 include non-essential benefits.

People who bought plans in Marion and Polk counties are affected, because those counties’ standard silver plans - which are used as a benchmark for the tax credits - contain nonessential benefits.

Under the ACA, people can choose to use some or all of their credit right away to lower their monthly premium, or they can wait and use it when they file their taxes, reducing the total amount of taxes owed.

The amount to be returned to the IRS would depend on the individual’s or family’s income and plan, on how much tax credit was used in advance or other factors. There are limits as to how much would have to be paid back.

Under the ACA, people who receive advance payments of the credit can “reconcile” it on their tax returns - and the amount they would have to repay would be capped if their income is less than 400% of the poverty level.

For example, an individual whose income falls under $22,980 wouldn’t have to return more than $300. One whose income falls between $34,470 and $45,960 would not pay back more than $1,250.


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