Obamacare

D-Day for Obamacare documents: Prove eligiblity or lose coverage

Time to prove it, or lose it.

More than 300,000 people are at risk of losing the Obamacare health insurance coverage they bought through HealthCare.gov by the end of this month if they don't meet a deadline Friday to verify that they are citizens or legal U.S. residents.

Many of those people, if they don't provide the requested documentation, also could be ordered to repay the Internal Revenue Service hundreds of dollars or more in subsidies they have received to help to pay for their monthly premiums.

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To qualify for Obamacare plans and any related subsidies, people must be either U.S. citizens or legal residents.

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Last month, federal officials sent out letters in English and Spanish to about 310,000 individuals to inform them of matching errors in their citizenship or immigration data. Officials gave them until Friday to provide documents confirming eligiblity. This group had failed to respond to as many as seven prior entreaties from officials via mail, phone or email to cough up the required documents.

As of Aug. 28, a total of 70,000 or so had replied to the latest demand, but it's unclear how many of these cases have been fully resolved.

Hospitals Medicaid dichotomy
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Hospitals Medicaid dichotomy

"We want as many customers as possible to remain enrolled in marketplace coverage, so we are giving these individuals a last chance to submit their documents before their coverage through the marketplace will end," said Marilyn Tavenner, administration for the Centers for Medicare and Medicaid Services, at the time of the warning on Aug. 18. Tavenner's agency operates HealthCare.gov.

Friday's deadline is just for those enrollees of plans sold through the marketplace, which serves residents of the 36 states that did not operate their own health insurance exchanges this year.

As of May, CMS has said, there were about 970,000 HealthCare.gov customers with citizenship or immigration data matching errors. That number represents about 18 percent of the total number of enrollees on HealthCare.gov.

Since then, CMS has closed about 450,000 cases after hearing from enrollees, and was in the process of resolving another 210,000 more.

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On the heels of the warning, an Aug. 28 story in USA Today reported that immigration advocates and insurance agents have said that even people who provided adequate documentation when they enrolled were being told there were questions about their eligibility. That story also quoted agents who described how some customers were unable to access their HealthCare.gov accounts to provide requested documents, and how even people who were able to upload such paperwork were told by CMS that it wasn't received.

CMS spokesman Aaron Albright on Friday said, "If people submit their information, they can call our call center and see if we have received the information. That list is updated daily." The call center number for HealthCare.gov is 800-318-2596.

An unknown number of other people who bought insurance through one of the 15 exchanges operated by individual states of the District of Columbia also have pending questions about their eligibility because of their citizenship or immigration status.

Kentucky's exchange mailed "little more than 1,700 individuals who did not submit the required information regarding citizenship, income or incarceration status," according to the spokeswoman for that marketplace, known as kynect. She added, "kynect has seen an overwhelmingly positive compliance rate as a result of these notices."

Kentucky has set a deadline of next Wednesday for the requested documentation to be submitted.

On Thursday night, the Covered California exchange said it is contacting about 98,000 families—about 148,000 covered individuals—to ask them to help resolve inconsistencies in data related to their eligibility. California's exchange gave those people a deadline of Sept. 30 to provide documentation, or risk termination of their health coverage.

"We're implementing a multichannel outreach to notify individuals who risk losing coverage," said Covered California Executive Director Peter Lee.

Lee urged people to act quickly to resolve the questions.

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"If we do not get your documents, Covered California must cancel your health insurance, along with any federal tax credit you may be receiving that lowers your monthly premiums," Lee said. "If you have received tax credits, and your health insurance is canceled, you may have to repay those tax credits. If your health insurance is canceled, you may also have to pay a tax penalty."

The tax credits, which are available on all Obamacare exchanges to eligible customers, often greatly reduce or eliminate altogether a person's monthly premiums. The subsidies are available to people who earn between one and four times the federal poverty level, or about $11,700 to about $46,700 annually.

If an enrollee is found to have been ineligible for those subsidies, they would owe the IRS money back, although there is a cap on the amounts the IRS can collect from some people, depending on their income level. The maximum IRS clawback is $1,250.

By CNBC's Dan Mangan