AHA: Hospitals Can Pay Patients' HIX Premiums

Cheryl Clark, November 18, 2013

In a legal advisory to hospitals, the American Hospital Association asserts that the federal government's own regulations "clearly allow for another person or organization to pay the insurance premium for the enrolling individual."

The federal government has no legal authority to prohibit hospitals from paying their patients' insurance exchange premiums to encourage their enrollment, despite a Nov. 4 Centers for Medicare & Medicaid Services statement implying that it does, according to a sharply worded legal advisory from the American Hospital Association.

What's more, there is clearly no prohibition against hospital-affiliated charitable foundations, or unrelated charities, paying these premiums on behalf of patients, the AHA said Wednesday. The financial assistance may be especially helpful to those would-be enrollees whose federal subsidies aren't enough to make coverage affordable.

The AHA offered hospitals guidance on the issue after CMS issued a vaguely-worded and somewhat threatening Q&A about third-party premium payments. The agency said that if healthcare providers such as hospitals pay premiums for their most expensive patients, "HHS has significant concerns with this practice because it could skew the insurance risk pool and create an un-level field in the marketplaces."

"HHS discourages this practice and encourages issuers to reject such third party payments. HHS intends to monitor this practice and to take appropriate action, if necessary."

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