Cover Oregon says at least 775 families affected by tax credit error, will owe money

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SALEM, Oregon — Cover Oregon has identified 775 households that will owe money to the federal government because they were given tax credits that were too large, the agency's director told a state legislative committee on Monday.

More than 42,000 families got tax credits beginning in January, and Cover Oregon officials have reviewed 92 percent of them for errors. Sixty-two percent of the identified tax credit errors were for less than $2 per month, but 4 percent of the affected households had errors of more than $100 per month, said Cover Oregon Executive Director Aaron Patnode.

"Our initial concern was that this could potentially impact a large population," Patnode told the Senate Health Care and Human Services Committee. "However, given the analysis we've conducted, we're finding out it's a relatively small population we've impacted with this error, and we'll be reaching out to those individuals to discuss a correction."

About 3,400 households still need to be reviewed, primarily those with complicated situations such as a change in coverage during the year, Patnode said. Officials will get in touch with the customers who will owe money when they file their federal taxes.

Cover Oregon officials have acknowledged they used an incorrect formula to calculate tax credits for people purchasing private health plans through the state's insurance marketplace.

Most plans on the exchange contain only 10 "essential health benefits," such as hospitalization, emergency or preventive services. Federal tax credits, which can lower monthly premiums for people earning up to 400 percent of the federal poverty level, apply only to the essential health benefits. Cover Oregon was calculating tax credits for the entire premium, charging too little from households that chose policies with additional coverage.

Democratic Sen. Chip Shields says the Legislature should cover taxpayers' costs for repaying the tax credit. Patnode estimated that would cost roughly $100,000 for the people already identified.

"It seems to me it would make sense that we as the Legislature, and as the executive branch, need figure out a way to make these people whole rather than make them pay for our mistake," Shields said.

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