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AHA: Hospitals Can Pay Patients' HIX Premiums

Cheryl Clark, for HealthLeaders Media, November 18, 2013

Safety Net Hospitals: 'Not a Green Light'
Even after Sebelius's reassurance, however, hospitals were still uneasy. According to Carl Graziano, spokesman for America's Essential Hospitals, even though the anti-kickback statute was no longer an issue, hospitals were concerned that "there may be other legal barriers to overcome, so [it is] not a green light."

The AHA legal advisory is clear:

"We believe that existing IRS precedent strongly supports a determination that providing this type of subsidy advances the charitable purpose of hospitals and that any benefit to insurers is incidental to achieving the larger public good of making health care available to those with financial need."

Providing subsidy support in the name of a charitable contribution, the advisory added, "is especially important for individuals residing in states that have chosen not to expand their Medicaid programs and could help fill the gap in making affordable coverage available to meet the needs in those communities."

Meanwhile, some hospitals have gone ahead and done so through charitable organizations. The University of Wisconsin Hospital and Clinics on Sept. 30 announced that it gave $2 million to United Way of Dane County to help low-income people purchase health plans on the state's exchange. The funds will help some 7,300 people, who now will pay only 2% of their premiums plus some out-of-pocket costs such as deductibles.

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3 comments on "AHA: Hospitals Can Pay Patients' HIX Premiums"


Stuart Showalter (11/25/2013 at 11:08 AM)
The AHA advisory is basically their advocacy position. It remains an open question whether subsidizing an insured's premium would be a violation of the kickback laws (state or federal) or some other anti-fraud statute. Regardless of the opinion of AHA, HHS or the DOJ, it would ultimately be for the courts to decide. Using a charitable foundation may be an option, but I urge careful legal analysis on a case-by-case basis.

Martha Carlton (11/19/2013 at 3:07 PM)
How is this different from healthcare systems offering HMO policies through HIX for $1 per month? As long as the patients can choose where they access it seems like a in- win.

Manuel H. Moraleda (11/19/2013 at 11:26 AM)
Ultimately this money that the hospital is using comes from insured patients. Would the federal government provide a bailout later in the event that the insurance company is placed at financial risk and would consider bankruptcy ?