Judge to consider whether to allow third-party premium payments

A federal court hearing in Baton Rouge, La., on Monday could shed light on whether hospitals, drugmakers and federal programs can make third-party premium payments to cover people on the Obamacare insurance exchanges.

Lawyers for Blue Cross and Blue Shield of Louisiana will argue to a federal judge that the insurer should be allowed to enforce its policy of not accepting federal grants or other third-party payments to buy plans for low-income people with HIV or AIDS.

The insurer's decision to refuse payments from the federal Ryan White program prompted a federal class-action suit against Louisiana Blues, alleging discrimination against HIV and AIDS patients. Judge Brian Jackson will hear oral arguments on whether to issue a preliminary injunction blocking the insurer's policy.

The controversy is not limited to Louisiana or Ryan White payments. Insurers nationally are wary of efforts by third parties to expand coverage by paying premiums for low-income people and those with chronic conditions. Hospitals treating uninsured and chronically ill patients and drug companies selling expensive name-brand drugs for people with particular conditions have a strong financial self-interest in paying for their coverage, since those patients would otherwise lack funding for treatments and drugs.

Insurers fear that most people covered through third-party payments will be sicker than average, skewing their exchange plan membership toward more costly patients. In a legal filing, the Louisiana Blues said its policy “is one of simple necessity to avoid the potentially devastating effects of adverse selection caused by providers paying for coverage only as soon as a patient needs it.”

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