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Sebelius OKs premium payments from third parties

May 23, 2014 | By
Tools

Third parties can make premium and cost-sharing payments on behalf of qualified health plan enrollees, with some caveats, according to outgoing U.S. Department of Health & Human Services Secretary Kathleen Sebelius.

The confusion about payments from hospital-affiliated and other charitable foundations started in November 2013, when HHS 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.

Sebelius, in a letter sent Wednesday to the American Hospital Association, reinforced a Feb. 7 guidance that requires insurers to accept third-party payments from Indian organizations and state and federal government programs or grantees (such as the Ryan White HIV/AIDS Program).

Insurers also must accept premium and cost-sharing payments made by private charitable foundations on behalf of enrollees selected for their financial status rather than their health status. For those enrollees, the Centers for Medicare & Medicaid Services expects premium and cost-sharing payments to cover the entire policy year, Sebelius said.

Insurers have voiced their opposition to charities paying for exchange consumers. For instance, when a charity in Los Angeles wanted to sign up 50 uninsured consumers to plans sold through California's health insurance exchange, insurers pushed back, saying the program would bring in too many sick and expensive people. Insurers also have wanted to block hospitals from purchasing insurance for poor or sick consumers, fearing it would create even more difficulties for the new online marketplaces, FierceHealthcare previously reported.

Although the new letter does not explicitly approve payment from "hospital-affiliated" foundations, Sebelius said no further guidance is necessary on the issue, a Health Affairs blog post noted.

For more:
- read the letter (.pdf)
- here's the Health Affairs blog post

Related Articles:
Obama administration, insurers oppose hospitals purchasing insurance to sick, poor
Insurers should reject third-party premium payments, HHS says
Insurers don't want charities paying for consumers

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