$0 credit subsidy confuses MNsure consumers

Yvonne Araiza, of St Louis Park, is eager for health insurance. Currently uninsured because she can't afford the premiums, she jumped on MNsure's website on day one in search of an affordable plan.

"I was very excited to see what there was to offer," Araiza said of the state's online insurance marketplace. "And the fact that the pre-existing conditions...wasn't going to be a consideration on how much you would have to pay."

After looking at a chart on the website, Araiza, who is employed, thought she was eligible for a tax credit based on her income and family size.

It took several days before she was able to create a MNsure account and determine the actual tax credit for which she qualified. The amount was zero.

"That was frustrating because I was expecting, according to the chart they had posted, I was expecting some sort of tax credit because of my income and the size of my household," Araiza said.

A recent study finds 90,000 Minnesotans are eligible for tax credits if they buy health insurance through MNsure. The tax credits are applied at the outset, bringing down the effective price of health coverage.

But being eligible for a credit doesn't mean consumers will definitely receive a credit.

The tax credit problem is one of the most asked questions coming into the MNsure call center. That's because there are a lot of moving parts in the tax credit determination.

The new federal health care law takes a kind of "Goldilocks" approach to the question of how much consumers should contribute to the cost of health coverage. Under the Affordable Care Act, the portion can't be too high or too low.

If the cost of a health plan burns up too much income, the premium tax credits kick in to lower a consumer's portion from too high to just right. The amount of a credit varies widely, depending on income and family size.

When a consumer's income is low enough to qualify for a tax credit, but low premiums are also available, the person can wind up in the "just right" range, even without any subsidy.

"So while they technically would be eligible for a tax credit, they fall into that income range," MNsure spokesman, John Reich said. "It's just that the premiums are so low, that they meet the affordability threshold."

Because consumers have had so many questions about this, MNsure has added informational voice-overs to the call center's hold music.

"Why do I qualify for a tax credit but the amount shown is zero?" a woman asks in the recorded message. "The amount of your tax credit is based in part on your income, where you live and the premium amount for a silver level plan in your area."

MNsure officials hope that by addressing one of the most commonly asked questions on the agency's on-hold recording, consumers will be less frustrated and call volume may decline.

Editor's note: This story has been modified from the original to reflect that Yvonne Araiza is employed.

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