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Another Update: Can Hospitals Pay Patient Health Insurance Premiums?

Here’s what’s new since the last update on whether or not a hospital can pay the health insurance premium for a patient:

Where federal regulators stand on third party payments of patient health insurance premiums has not been clearcut. Based on a letter from the Centers for Medicare & Medicaid Services on May 21, the American Hospital Association has advised members that “payments from private, not-for-profit foundations to qualified health plans (QHPs) on behalf of individuals who enroll in coverage via the Health Insurance Marketplaces are not prohibited.” However, AHA also points out there is no federal mandate that qualified health plans must accept premium subsidies from hospitals.

The insurance industry represented by America’s Health Insurance Plans wants premium support payments to be made only through independent foundations and not directly from hospitals or hospital-affiliated foundations. Insurers fear third-party premium payments for already sick patients could unfavorably skew the insurance pool and drive up costs.

Nonetheless, some hospitals are moving ahead to assist patients. The South Florida Hospital and Healthcare Association and the Healthcare Association of New York State are each looking at coordinating third party premium support options for their members.


HHS confirms payments from foundations to QHPs are not prohibited. American Hospital Association Legal Advisory, June 5, 2014. http://www.aha.org/advocacy-issues/tools-resources/advisory/2014/140605-legal-adv.pdf  [AHA members only]

Sebelius K. Letter to R. Umbdenstock, American Hospital Association, re: qualified health plan issuers accepting premium and cost-sharing payments from third parties. Secretary of Health and Human Services, May 21, 2014. http://www.aha.org/content/14/140521-sebelius-umbdenstock.pdf

Appleby J. Hospitals seek to help consumers with Obamacare premiums. Kaiser Health News, Aug. 14, 2014. http://www.kaiserhealthnews.org/Stories/2014/August/14/Hospitals–Seek-To-Help-Consumers-With-Obamacare-Premiums.aspx

Related sources:

Office of Inspector General, Dept. of Health and Human Services. Supplementary special advisory bulletin: independent charity patient assistance programs. Federal Register 79(104):31120, May 30, 2014. http://t.co/xyGQ6O86yt

Clark C. Hospitals begin subsidizing exchange premiums via third parties. HealthLeaders Media, May 28, 2014. http://www.healthleadersmedia.com/page-1/HEP-304974/Hospitals-Begin-Subsidizing-Exchange-Premiums-via-Third-Parties

Caramenico A. Sebelius OKs premium payments from third parties. FierceHealthPayer, May 23, 2014. http://www.fiercehealthpayer.com/story/sebelius-oks-premium-payments-third-parties/2014-05-23

Jost T. Implementing health reform: third-party payments and reference pricing. Health Affairs Blog, May 22, 2014. http://healthaffairs.org/blog/2014/05/22/implementing-health-reform-third-party-payments-and-reference-pricing/

Carlson J. HHS warns that premium-assistance charities must be independent. Modern Healthcare, May 22, 2014.  http://www.google.com/url?sa=t&rct=j&q=&esrc=s&source=web&cd=1&cad=rja&uact=8&ved=0CCIQFjAA&url=http%3A%2F%2Fwww.modernhealthcare.com%2Farticle%2F20140522%2FNEWS%2F305229964&ei=S26bU9i1HM6dyASf-ILIDA&usg=AFQjCNHyKUVKd2VEJYQmQWzExf3jDuwlNQ&bvm=bv.68911936,d.aWw

Miller JS. Letter to Marilyn Tavenner, Centers for Medicare & Medicaid Services, re: Patient Protection and Affordable Care Act; third party payment of qualified health plan premiums – (CMS-9943-IFC) AHIP comments. America’s Health Insurance Plans, May 13, 2014. http://www.regulations.gov/contentStreamer?objectId=09000064816f7ae5&disposition=attachment&contentType=pdf

CMS interim final rule: premium subsidies. American Hospital Association Legal Advisory, April 8, 2014. http://www.aha.org/advocacy-issues/tools-resources/advisory/2014/140408-legal-adv.pdf  [AHA members only]

Centers for Medicare and Medicaid Services. Patient protection and affordable care act: third party payment of qualified health plan premiums; interim final rule with comment period. Federal Register 79(53):15240, March 19, 2014. https://www.federalregister.gov/articles/2014/03/19/2014-06031/patient-protection-and-affordable-care-act-third-party-payment-of-qualified-health-plan-premiums

HHS issues interim final rule on premium subsidies; continues to discourage insurers from accepting premium support from hospitals. American Hospital Association Special Bulletin, March 14, 2014. http://www.aha.org/advocacy-issues/bulletin/2014/140314-bulletin.shtml [AHA members only]

Centers for Medicare and Medicaid Services. Third party payments of premiums for qualified health plans in the marketplaces. Feb. 7, 2014. http://www.aha.org/content/14/140604-aha-cms-faq.pdf

Posted by AHA Resource Center (312) 422-2050, rc@aha.org