Can Hospitals Pay Patients' Health Insurance Premiums?

Cheryl Clark, September 30, 2013

It's not clear whether hospitals can legally advance patients premium money for coverage obtained from health insurance exchange markets. But the potential for conflict is apparent.

What if hospitals covered monthly premium payments to encourage patients to enroll in the new health insurance exchange markets, especially for people with higher risks of hospitalization in the coming year? What could be wrong with that?

That's the essence of the question American Hospital Association president Rich Umbdenstock asked Mandy Cohen, MD, senior advisor to the Centers for Medicare & Medicaid Services administrator, during a Sept. 16 webinar on what hospitals might do to get more of their otherwise uninsured patients enrolled.

"One of the questions that several of our members have asked us before," Umbdenstock said, "and I see it's in here again, is the question, 'If the patient qualifies in the exchange, but still doesn't feel as though they have the money after the subsidy to buy a plan, can the hospital do that for them?'"

"Can the hospital buy the plan on their behalf?" Cohen stated, as if she wasn't sure she heard correctly. "You know, I don't know the answer to that question…It's a good question. I'd like to say yes. But let me check with people like lawyers."

"That's a very complicated one, I know," Umbdenstock replied.

After all, without health insurance, many patients—especially those with a history of frequent hospitalizations—would otherwise end up as expensive charity care, forcing hospitals to absorb more uncompensated care expense. And this is coming at a time when federal disproportionate share funding is diminishing and charitable care deduction definitions for hospitals are getting narrower.

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