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Can Hospitals Pay Patients' Health Insurance Premiums?

Cheryl Clark, for HealthLeaders Media, September 30, 2013

Patients might also end up sicker, and more likely to use the emergency room instead of a primary care provider. Coverage can secure medication and other services these patients need to keep them out of acute care settings, not to mention provide them healthier quality of life. And hospitals already discount charges for the uninsured through their financial assistance programs.

A CMS spokesperson on Friday said via e-mail that the agency has not released guidance on third-party payers.

Mollie Drake, senior director for Scripps Health's Corporate Access Management, says that if a hospital is thinking about advancing patients' premium money to encourage coverage, they might be envisioning a scenario like this:

Many patients might enroll in the exchange, but they don't pay up on time, voiding their policies.

"There's a 90-day grace period," Drake says. "A patient may not pay their premiums for 90 days, and the healthcare providers won't realize it [because] we're able to bill and receive reimbursement. But then if [the patient] goes into default, [the plan or payer] has the right to come back and take the money back," Drake says.

"So this may be a circumstance where a provider might say, 'Well, I'd much rather pay this $300 premium for the patient rather than have a $6,000 payment revoked."

Jim Lott, former vice president of the Hospital Association of Southern California and now executive vice president for COPE Health Solutions, says the question is tricky, but that such financial assistance is very plausible.

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2 comments on "Can Hospitals Pay Patients' Health Insurance Premiums?"


George Burns (10/3/2013 at 11:53 PM)
It can be done quite easily. You can take some initial guidance from IRS PLR 199915054 and others. Contact me if you need help.

Bill Allison (10/3/2013 at 4:41 PM)
Correct me if I'm wrong but wasn't a precedent set years ago when providers started paying patients COBRA payments to ensure payment for services?