By Julie Appleby
Wed, Aug 13 2014
Low-income consumers struggling to pay their premiums may soon be able to get help from their local hospital or United Way.
Some hospitals in New York, Florida and Wisconsin are exploring ways to help individuals and families pay their share of the costs of government-subsidized policies purchased though the health law’s marketplaces – at least partly to guarantee the hospitals get paid when the consumers seek care.
But the hospitals’ efforts have set up a conflict with insurers, who worry that premium assistance programs will skew their enrollee pools by expanding the number of sicker people who need more services.
“Entities acting in their [own] financial interest” could drive up costs for everyone and discourage healthier people from buying coverage, insurers wrote recently to the Obama administration.
Insurers are asking the federal government, which regulates the health insurance marketplaces, to restrict the practice.
To date, regulators have sent mixed messages about whether they will permit such programs—even as providers across the country are moving to set them up.
“We saw the need in our community,” said Sarah Listug, spokeswoman for United Way of Dane County, a Wisconsin group that is using $2 million donated by a local hospital system to help more than 650 near-poverty-level policyholders pay their premiums. “We have had calls from all over the U.S. asking how to set up partnerships like this.”
The South Florida Hospital and Healthcare Association is seeking at least $5 million in donations from its 45 member hospitals toward premiums for first-time insurance buyers next year.
And members of the Healthcare Association of New York State, which represents 500 hospitals and nursing homes, are considering expanding existing consumer assistance programs to help people pay their premiums “to the extent that is legal and proper,” said Jeffrey Gold, senior vice president and special counsel.
Providers Have Financial Incentive
Hospitals or their foundations have long paid premiums for some patients— often those who fell behind after leaving their jobs and taking on the entire cost of coverage under a 1986 law known as COBRA.
But the issue of “third-party payments” has taken on new urgency because of a provision in the federal health law that could leave providers on the hook for unpaid bills. Under the law, insurers must give subsidy-eligible enrollees who fall behind on payments a 90-day “grace period” before cancelling their policies.
While insurers must cover bills for the first 30 days, they may hold off paying those bills for the next 60 -- and ultimately, deny payment if the patient doesn't catch up on premiums. That means doctors and hospitals face the prospect of not getting paid for their services, or having to seek payment directly from their patients.