Large insurance companies are lobbying the federal government to wipe out third-party health insurance premium payers.

As reported by Kaiser Health News, here’s the basic scenario:

People living on the fringes of poverty who have high medical expenses have been qualifying for health insurance premium subsidies under the Affordable Care Act, but they can’t quite make the remaining monthly payment. So they seek help from a growing number of organizations that have set up accounts to help them keep their coverage so they can get the medical care they need.

Kaiser Health News offered up examples of several people who have chronic medical conditions who now have coverage, thanks to these benevolent groups.

But the big insurers say it’s unfair. These arrangements are driving up claims and putting more pressure on insurers that are already wondering whether they should continue to offer the Affordable Care Act plans.

One study released by the insurance lobby cites an insurer that faced skyrocketing claims from dialysis patients after its clients with dialysis soared from 28 in 2013 to 186 last year.

America’s Health Insurance Plans, an insurance trade group, has been hammering Congress and the Centers for Medicare and Medicaid Services (CMS) to eliminate these third-party premium payment groups. “In many cases, these practices are harming patients and undermining the individual market by skewing the risk pool and driving up overall health care costs and premiums,” AHIP said in Sept. 22 letter to CMS.

In some cases, the large insurers are going toe-to-toe with major hospitals and even social service giants such as the American Kidney Foundation and United Way.

Kaiser Health News cited the case of HealthConnect in Madison, Wisconsin, a third-party payment group set up by the United Way of Wisconsin’s affiliated hospital, UW Health.

The “fund” created by UW Health is administered by HealthConnect and supports the health plans of hundreds of people who find it difficult even to pay the lower subsidized premiums. While the fund itself isn’t huge ($2 million), insurers point out that those subsidies can trigger millions in claims from people with costly treatment programs. And, insurers fear, as these organizations proliferate because of the social service missions of nonprofits, insurance profits are going to take ever larger hits.

But the issue will likely be another hot potato pushed off into the new president’s lap. CMS, which controls the federal response to the matter, has told insurers it has taken the complaints under advisement and will get back to them later.

Instant Insights /

Insurers lobby government to end third-party premium payers

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