Sebelius OKs Foundation Subsidies for QHP Enrollee Premiums

Cheryl Clark, May 23, 2014

Third-party payments of premiums and cost-sharing made on behalf of Marketplace-qualified health plan enrollees by private, not-for-profit foundations are permitted—with some safeguards.

Hospital officials hoping to route financial subsidies to patients struggling with health insurance exchange plan premiums sighed with relief Thursday after HHS Secretary Kathleen Sebelius said in a letter it's okay for them to do so, if they follow certain protocols.


Kathleen Sebelius
Secretary, HHS

But the funds must be transferred to patients through private, not-for-profit foundations, and only for patients selected for their "financial status," not for their health status. Sebelius further said the Centers for Medicare & Medicaid Services "would expect that premium and any cost sharing payments cover the entire policy year."

"We know that even with [federal] subsidies, some people can not afford their premiums, so we've supported ways that foundations can offer assistance with premium payments and make sure those patients keep their coverage," says Jeff Tieman, chief of staff for the 600-hospital Catholic Health Association.

Guidance "that [foundations] are not prohibited from making payments to health plans… gives our members the room to move forward," he says.

Preventing Misconduct
Tieman adds that his organization is "pleased to see that there are safeguards built into it, like not considering a patient's health status and requiring that premiums are covered for a year."

That, he says, "prevents misconduct," in which a hospital or a foundation might use the subsidies to help only the most expensive and sickest patients during an acute episode of care.


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