Obama Administration, Insurers Oppose Hospitals Purchasing Insurance For Sick, Poor


The Obama administration and insurers oppose a proposal that hospitals buy their sickest and poorest patients health insurance under the Affordable Care Act, in fear it would create even more difficulties in the new healthcare exchange, the Financial Times reported.

Hospitals purchasing insurance plans for chronically ill or poor patients might skew the insurance risk pool, which needs to enroll 2.7 million healthy, young people out of the anticipated 7 million by March 2014 in order to keep premiums low, according to the article.

This could mean patients in red leaning states, such as Texas and Florida, that didn’t expand Medicaid could be vulnerable, leaving them without access to the federal insurance program and unqualified for the tax subsidies under the rules of the healthcare exchange, the article said. The healthcare reform law assumes that population would already receive assistance through Medicaid.

Insurance companies argue that if hospitals buy insurance for their sickest patients–a practice barred in the past by federal anti-kickback laws–it will drive up costs for consumers, employers and taxpayers, the Financial Times reported.

The legality of hospitals purchasing insurance hinges on the vocabulary used to define the online health exchanges, which U.S. Secretary of Health and Human Services Kathleen Sebelius stated in a letter were not federal healthcare programs, according to the article. Although the Obama administration expressed concerns about the possibility of hospitals purchasing insurance, the article said there are no regulations that expressly ban such payments.

Insurers say healthy people could also be kept out of the exchange thanks to President Barack Obama’s recent announcement that insurers could reinstate cancelled health plans for another year.