Insurers, hospitals at odds over patient financial assistance programs

As healthcare costs rise and more low-income consumers get insurance under healthcare reform, an increasing number of patients will struggle to pay their premiums, hospitals and charitable are looking for ways to help them. While this might sound great to patients who need financial aid, payers are not so thrilled with the initiative, reports Kaiser Health News.

Payers worry the financial assistance from hospitals will affect their risk pools by increasing access to sicker members who require more services and by discouraging younger, healthier people from purchasing plans.

The battle over financial assistance is ongoing. Last year, a charity in Los Angeles wanted to sign up 50 uninsured consumers to plans sold through California's health insurance exchange, but insurers pushed back, claiming the program would bring in too many sick and expensive people, FierceHealthPayer previously reported. 

Late last year, the Department of Health and Human Services encouraged insurers to reject third-party premium payments. It cited "significant concerns" that hospitals supporting premium payment and cost-sharing obligations would skew the insurance risk pool.

Last May, then-HHS Secretary Kathleen Sebelius clarified the previous HHS guidance, saying insurers must accept third-party payments from Indian organizations and state and federal government programs or grantees, such as the federal Ryan White Foundation, which helps fund care and treatment for people living with AIDS and HIV.

Insurers also must accept premium and cost-sharing payments made by private charitable foundations on behalf of enrollees--so long as they are selected for their financial status rather than their health status. 

So while it's unclear if hospitals can offer financial assistance, insurers would prefer hospitals not choose patients based on the severity of their health conditions.

"If third parties provide incentives to gain coverage only once someone is sick, that will--as the administration has warned--clearly lead to a less healthy risk pool and put upward pressure on premiums for everyone," Brendan Buck, a spokesman for the America's Health Insurance Plans, told KHN.

So to avoid issues, hospitals are drafting selection criteria based on income level--they'll then pay consumers' premiums for an entire year, instead of when they overlap, notes KHN.

And because third parties can make premium and cost-sharing payments on behalf of qualified health plan enrollees, the provision could leave providers on the hook for unpaid medical bills. 

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- here's the KHN