Marketplace insurance won't process claims for terminated policy

Question

I seeking help for issues I have with a health care policy I subscribed thru the New York State Marketplace.

I lost my job on April 15 (job policy end date was April 30) so I started looking for a job but since I could not find one I applied to the marketplace in June with the intention of avoiding the coverage gap penalty.

A navigator helped me choose the policy and we agreed that she would ask for backdating the application to May 1st, since I had to go to ER on May 28th. We did not spoke thereafter so when the first bill from the chosen provider came, quoting the payment as being for July, I assumed that the backdating was not accepted.

Weeks later, instead, I started receiving bills for "unpaid months of June and July", and a notice that my policy was suspended. I called and they confirmed that the backdating indeed succeeded. However, meanwhile I had found a new job that comes with health care benefits, so by mid-July I had already canceled the marketplace policy.

I'm willing to pay the two missing premiums, however the provider now tells me that even if I do pay, they won't process the May 28th claim and another one on July 17th, because I terminated the policy.

Is this legal under current health care legislation? If I pay the premium, I would assume that makes the 3 months fully covered, so I should be able to file claims.

A couple of days ago they sent a letter telling me that I have until Sept 8th to pay the premium ("grace period"), and that if I don't the plan will be considerate cancelled. They add that:

you may be responsible for premiums before your plan was suspended (during the first month of your grace period)

you might be responsible for claims filed while your plan was suspended (during the last two months of your grace period)

you may have to repay any financial assistance or subsidies the next time you file taxes

I indeed had financial assistance for the plan. Would I need to refund the financial assistance for only the 1 month premium I paid or for all 3 months the plan was active or suspended?

I did find a new job but I'm still in financial hardship so I'm really trying to pay the less money I can.

Answer 1

This is really unfortunate. In general you can't back date individual policies. You could have (if it was available to you) elected to extend your employer's coverage via COBRA for the month of May, and possibly June depending on when your application was submitted, then let the individual coverage take over when it became effective.

Groups have some latitude to retroactively cover and terminate employees but that's not an option in the world of individual coverage, the carriers are very strict about submission deadlines for specific effective dates. This is one of the very few ways that carriers are able to say "no" within the bounds of the ACA. You submit an application, you are assigned an effective date based on the date your application was received and subsequently approved. It has nothing to do with how much money you send them or whether or not you told them to back date your application.

If someone at the New York exchange told you you could have a retroactive effective date they shouldn't have.

Many providers have financial hardship programs. You should talk to the ER hospital and see what might be available to you. The insurer is likely out of the equation though if the dates of service occurred before your policy was effective.

Regarding your 6th paragraph regarding having paid the premium. In this day and age carriers can only say "no" via administrative means. They set extremely rigid effective dates based on your application date. They will absolutely cancel you if you miss a payment. If you get money to them but it was after the grace period date (even by one minute) they will not reinstate you. If you're cancelled you must submit a new application which will create a new coverage gap. You pay a few hundred dollars each month to insure infinity risk, you absolutely have to cover your administrative bases because it's the only way a carrier can say "no" anymore so they cling to it.