A THCB reader writes in:
“I understand that part of the population will qualify for subsidies and others will not.
What I do not understand, nor do I think that those getting subsidies understand, is how will the monthly cost be paid.
For example (this is made up), the insurance I am quoted costs $1,200 per month, however, I qualify for a $500 per month subsidy. When I pay the bill each month do I pay $1,200 or $700. My understanding is that the ACA is showing people the Net cost with the subsidy applied. I would assume that one would pay the full amount and hope to get the subsidy as a refund when taxes are filed.
Unfortunately, I can not afford to pay $1,200 per month up front and am unable to wait to file taxes and hope to get the refund in a timely manner. Those that get subsidies are most likely lower paid, already struggling to make ends meet, and will be unable to pay the up front value. How does the ACA work regarding paying the monthly costs? What happens if a person is audited? Does it delay their subsidy?
What happens if refunds are late? How are people supposed to pay their bills if they are counting on the subsidy in their refund?
If those that do receive subsidies have to pay the entire cost up front, then this will turn into a very big cash flow issue for them. Is this how the program works? If the ACA Website is showing the net cost with the subsidy applied, however, does not clearly state that you pay the full cost up front and receive the subsidy with your tax refund, then I find that to be very shady advertising.”
