The decision by a Louisiana insurer to restrict third-party premium payments to help people with HIV and AIDS pay for health insurance on the state insurance exchange
has called new attention to a policy debate over whether third-party payments should be allowed for anyone on the Obamacare insurance exchanges.
Robert Darrow of Shreveport, La., found out last week that he may lose his Blue Cross insurance plan offered by Blue Cross and Blue Shield of Louisiana because the premiums are paid for by grants from the federal Ryan White program for lower-income Americans with HIV and AIDS. Though the insurer insists it "has not dropped any current Blue Cross and Blue Shield of Louisiana members because of this policy," the change means Darrow will lose his Blue Cross coverage.
The Louisiana Blues is one of the health plans following the CMS' advice from last fall urging insurers to reject premium payments from anyone but family members for individual-market health plans on the state exchanges. Following a Reuters report, the insurer confirmed
that its new rules forbidding third-party, premium-assistance payments are effective March 1.
"This is a debacle," Darrow said. "Insurance companies have found this loophole to get rid of their high-cost policy holders."
A Blue Cross statement says its members can still accept grants directly and then personally pay the premiums. But Darrow said that's not an option under the Ryan White program.
But that option may allow people to receive premium assistance from hospital- and drug company-based programs that donate money to independent foundations for the purpose of paying the premiums of lower-income or chronically ill patients. Hospitals and drug companies have an interest in paying premiums for such patients so they can receive insurance reimbursement for their services and products.
Insurers, however, say such third-party premium payments—which generally go to patients with pre-existing medical conditions—could skew their risk pools with sicker people or even expose them to fraud.
The debate is unfolding
in a policy gray zone that critics say the CMS created. An Oct. 30 letter from HHS Secretary Kathleen Sebelius said such third-party payments would not be illegal under Medicare's anti-kickback law.
But on Nov. 4, the CMS' Center for Consumer Information and Insurance Oversight urged insurers to reject third-party premium payments made on behalf of patients because of the potential negative effect on the Obamacare exchange plan risk pools. Then, on Feb. 7, that CMS office issued a clarifying statement (PDF)
that its advice to reject the payments did not apply to federal programs like Ryan White or to independent not-for-profit foundations.
The CMS office said foundations can indeed make payments on behalf of means-tested financial assistance programs but that the selection of beneficiaries must be based on written criteria and without regard to the patients' health status.
The Louisiana Blues say they offer more plans on the state insurance exchange than any other insurer and have to safeguard those plans against patient-steering and manipulation "by people or organizations trying to take advantage of their situations for their own personal gain." In particular, the company said medical equipment suppliers have paid premiums for patients that they steer to preferred plans with which the suppliers have favorable deals.
“We are acting in the best interest of our current and future policyholders to take as many precautions as we can to protect the financial stability of our company," the Blues statement said. "We are strengthening our payment process to ensure we are dealing directly with our policyholders and reducing the chance that other parties could take advantage of this situation."
It's not clear if other insurers have implemented similar policies.
Asked to comment, the Louisiana Blues would only say that it's policy on third-party payments would affect hundreds of people.
More than 100,000 people have signed an online petition
started by Darrow to urge the Louisiana Blues to accept payments from the federal Ryan White program.Follow Joe Carlson on Twitter: @MHJCarlson