Hospitals shouldn't pay patient premiums, insurers warn

Many hospital administrators in New York are contemplating paying health insurance exchange premiums for patients who fall behind on their payments while receiving services, essentially indemnifying themselves against uncompensated care.

However, the insurance industry is pushing back on that proposal, saying it will stick them with large bills and create other problems.

"There are concerns that this will have a very negative impact on the risk pool," Leslie Moran, spokesperson for the New York Health Plan Association (NYHPA), told Capital New York.

U.S. Department of Health and Human Services Secretary Kathleen Sebelius's legal position would allow hospitals to pay premiums for patients who purchased insurance on the exchange and fall behind on their payments without violating kickback laws, according to Capital New York. Hospitals are apparently poised to do this not only in New York but also in the Indianapolis area, the Indianapolis Business Journal reported.

"I know that hospitals are anxious to get clarification before proceeding with plans to pay part of any premiums," Brian Tabor, vice president of government relations for the Indiana Hospital Association, told the Business Journal. "I can't put a number on it, but I would say there is significant interest in looking at this option."

HHS has since tried to soften its position on this matter in an attempt to discourage hospitals from doing so. Indeed, the agency recently issued a Q&A that echoed the risk pool concern voiced by the NYHPA. But HHS apparently has no legal authority to enforce such a prohibition.

The issue could become of paramount concern among patients with chronic health conditions. A recent study by Avalere Health concluded these patients would become underinsured and likely would have large out-of-pocket costs--the kind of costs that could cause them to fall behind on their premium payments. At the same time, chronically ill patients are more likely to be hospitalized than other segments of the population.

To learn more:
- read the Capital New York article
- here's the Indianapolis Business Journal article

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