Insurers don't want charities paying for consumers

A charity in Los Angeles wants to sign up 50 uninsured consumers to plans sold through California's health insurance exchange, but insurers are pushing back, saying the program would bring in too many sick and expensive people.

A Better LA, a nonprofit organization, said it received approval from California officials to pay $50 to $100 a month to cover the portion of the consumers' premiums that aren't already financed by federal subsidies, the Wall Street Journal reported.

The problem, insurers claim, is A Better LA's efforts could result in a disproportionate amount of members with expensive chronic conditions, compounding the fact that the glitch-plagued exchange rollout already has brought more sick consumers than healthy ones. 

It's not only A Better LA insurers want to prevent from paying consumers' health plan premiums. They also want to block hospitals from purchasing insurance for poor or sick consumers, FierceHealthcare previously reported.

"It is a conflict of interest for hospitals and drug companies to pay patients' premiums and cost-sharing for the sole purpose of increasing utilization of their services and products," Karen Ignagni, CEO of America's Health Insurance Plans, told the WSJ.

And Joseph Miller, AHIP's general counsel, said laws governing tax-exempt organizations could limit activities deemed to be enriching to themselves or another organization.

The U.S. Department of Health & Human Services hasn't provided clear guidance on the issue. Secretary Kathleen Sebelius said in an Oct. 30 letter to a Congressman she doesn't consider exchange plans to be federal healthcare programs, so they aren't subject to rules preventing providers like hospitals from offering subsidies or rebates to consumers. But only a few days later, HHS said it would "discourage" hospitals from paying premiums and even asked insurers to reject those payments.

To learn more:
- read the Wall Street Journal article

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