The Idaho Department of Insurance is poised to tell health insurance companies when they can allow Idahoans to rely on charities for help with their premiums, copayments or other out-of-pocket costs.
The guidance would apply to “third party payments,” which are made by a person or entity other than the insured person or his/her family member. It would require insurers to accept such payments, but not from charities tied to businesses that stand to gain financially.
The Statesman reported in March that health insurers — including Blue Cross of Idaho — were beginning to tell members that they cannot rely on charitable assistance.
Blue Cross of Idaho had rejected $20,000 of foundation assistance for Kuna cancer patient Colin Smith, citing its new policy that bans third parties from paying a person’s insurance premiums. That policy is meant to weed out “shell games,” Blue Cross of Idaho spokesman Josh Jordan told the Statesman then.
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“If I’m going to donate $500 million over the course of five to six years to a [nonprofit] corporation, that is then directing business to me that I’m going to make a billion dollars off of, that’s a pretty slippery slope,” Jordan said.
Smith had received grants from Washington, D.C.-based The Patient Access Network and Texas-based Good Days from CDF to cover his out-of-pocket costs for an expensive medication. Blue Cross refused to credit those payments toward the cost-sharing portion Smith had to pay before Blue Cross would cover his medication.
Smith and his caretaker complained, and Blue Cross of Idaho then decided it had made a mistake and reversed its decision.
Jordan was unable to determine why the insurer at first rejected Smith’s foundation assistance. But he said the foundations that helped Smith were the types of “benevolent” organizations Blue Cross supports helping patients with high medical costs.
Already, it is illegal in Idaho for hospitals, doctors and other medical providers to waive or pay a person’s out-of-pocket costs, the department said in a recent notice.
But the department has received “several complaints from consumers and questions from (insurers)” as other groups move in to cover those costs, Director Dean Cameron said in an email to the Statesman.
Insurance companies did not request formal guidance, but the department noted a “particular concern at this time” about charities linked to health care companies offering such assistance. Those companies can profit from patients having insurance when they get care — because then, the visit can be billed to insurance.
“The third-party payment issue has multiple components, including subsidies from pharmaceutical companies to arrangements for premium payments for dialysis patients,” Cameron said. “The department is attempting to provide guidance that is fair to all consumers and within the perimeters of the law.”
Cameron said insurance companies should accept third-party payments in “the majority of situations.”
The guidance would require them to take certain types of third-party payments beyond what is mandatory under federal law.
But, Cameron said, insurers are “discouraged from accepting payments from entities who are financially interested or who would gain financially. We have defined ‘financially interested’ as an entity (that) receives the majority of its funding from those who could financially gain.”
The draft guidance does not define which types of organizations or charities would fall into the acceptable category, or specify how insurers would identify unacceptable financial ties. Nonprofits are not required to disclose their funding sources.
The draft does not itself block payments from self-interested charities.
It’s important to understand that this draft bulletin does not prohibit insurers from accepting any third-party payments.
Kathy McGill, health insurance specialist, Idaho Department of Insurance
The draft guidance neither prohibits nor requires insurers to let patients use discount cards issued by drug companies.
The department published draft guidance on May 11 and is seeking public comments through 5 p.m. Friday, May 27.
To comment, email Kathy McGill at firstname.lastname@example.org or send a letter to Idaho Department of Insurance, P.O. Box 83720, Boise, Idaho, 83720-0043.