Cheryl Clark | 05/28/2014
A collaboration between a Wisconsin United Way chapter and the University of Wisconsin Hospital and Clinics uses a hospital financial gift to help defray the cost of health insurance for some potential enrollees. It could be a model for others.
Months before HHS Secretary Kathleen Sebelius gave the okay this month for third-party non-profit foundations to pay premiums on behalf of exchange enrollees, a few organizations were already imagining creative ways to do just that.
One—a collaboration between Wisconsin’s United Way of Dane County in Madison and the 471-bed University of Wisconsin Hospital and Clinics—is not only up and running, it’s perhaps the best known.
Others, like the South Florida Hospital & Healthcare Association, a trade group for 45 hospitals in Broward, Dade, Palm Beach and Monroe counties, hope to have a program underway soon.
“We have a task force that’s been looking at aggregating our funds in part because of our legislators’ obstinence” [to expand Medicaid], says Linda Quick, SFHHA president. Of the one million people left without coverage by that decision, Quick says, “600,000 are in our counties, so we have a disproportionate share.”
“Our goal is to have [the payment program] up and operational when the next enrollment period starts, Oct. 1,” Quick says.
UW and HealthConnect
As of March 31, United Way’s HealthConnect program has used the bulk of a $2 million gift from one hospital, UW Health, to help 630 households— about 750 people—with health exchange plan subsidies. The amount ranges from $27.61 to $675 per month for the rest of the year, says Sandy Erickson, United Way Health Initiatives director.
Potential enrollees were recruited through the United Way’s many programs and exchange plan assisters. The HealthConnect requirements are that potential enrollees purchase an advance premium tax credit plan, reside legally in the United States, and earn between 100% and 150% of the federal poverty level. HealthConnect pays the portion of the health insurance premium that isn’t covered by the federal subsidy.
Lisa Brunette, spokeswoman for the University of Wisconsin Hospital and Clinics, says the gift was made even though her healthcare system knows many of the patients who get premium subsidies from this program will access care from the other three hospital systems in Dane County, systems that Erickson says chose not to contribute to the fund for the first year.
Erickson hopes those systems will kick in for the 2015 enrollment period by Oct. 1, after they see how the first year went.
“Our decision to support HealthConnect should result in more people having coverage they can afford, whether they use UW Health as a provider or not,” Brunette says. UW expects that means they’ll get primary care and other services they weren’t able to get before, and that will keep them out of all emergency departments.
Questions About Eligibility
In South Florida, Quick says a four-county hospital program could pool hospital funds to seed a foundation philanthropy that gives subsidies to enrollees who meet low income qualifications. For now, about 25 hospitals seem to be serious about their participation, she says.
“We’re not as far along as [Wisconsin], and no dollars have changed [hands]. But many of the hospitals are saying ‘I’ll play if he plays.’ ”
Scenarios include a $5 million, a $10 million, or a $15 million pool, depending on how the program works, what income criteria are set, and how much of the difference between an enrollee’s federal subsidy and their out-of-pocket costs the group decides to pay for.
Of course, not all 600,000 uninsured people will get financial help, and it’s unclear how the non-profit entity that coordinates the effort will determine eligibility.
Based on Sebelius’s May 21 letter to the AHA, these programs appear to be prohibited from using a health plan enrollee’s health status, prior healthcare services utilization, medication use, or pre-existing condition to prioritize who gets financial help.
Otherwise, it would seem, patients with the most severe health conditions, requiring the most expensive kinds of care, would get priority.
Another apparent intent expressed in the letter is to preclude a hospital from ponying up premiums for its most expensive frequent fliers, or for individuals they anticipate from their risk profile will undergo an expensive hospital stay. The letter states:
“The payments are made by private, not-for-profit foundations on behalf of QHP enrollees who satisfy defined criteria that are based on financial status and do not consider enrollees’ health status. In this situation, CMS would expect that premium and any cost-sharing payments cover the entire policy year.”
Young Enrollees
Quick says that “before Sebelius’ guidance letter, the groups thought that maybe we could layer on to some of these qualifications certain health status indicators, like for instance people with cancer or diabetes or some other particular healthcare need. But clearly, I’m pretty sure, that wouldn’t fly.”
It’s conceivable that some, or even a lot, of the subsidized exchange enrollees will be the healthiest of the underinsured. Within the United Way program in Wisconsin, Erickson says, a preliminary survey based on the first few months of enrollees, 32% of those receiving HealthConnect assistance were under age 35.
Beth Feldpush, spokeswoman for America’s Essential Hospitals,which represents hospitals treating large numbers of uninsured or underinsured, says the Sebelius letter is “definitely a step in the right direction,” but doesn’t go far enough.
Feldpush says that the Health and Human Services Department “should allow hospitals to make payments directly on behalf of their patients.”
That’s because for many patients who do enroll, it’s the first coverage they’ve ever had, and “we’re concerned that individuals who may initially get coverage under the exchange may not be able to afford that coverage, and we may see…people falling back off their and become uninsured again, and then they become charity care patients once again.”
Feldpush says she finds “confusing” the sentence in Sebelius letter suggesting that if hospitals, other healthcare providers and other commercial entities offered assistance directly to exchange enrollees, the practice “could skew the insurance risk pool and create an uneven competitive field in the marketplaces.”
Lower Costs, Greater Coverage
“On one hand,” Feldpush says, “the intent of the [Patient Protection and Affordable Care Act] was to expand the eligibility of coverage to individuals who previously did not have it, whether it was financially unattainable to them or they had preexisting conditions, or other reasons why they weren’t insured or why private insurance didn’t pick them up previously.
“So it does appear that [HHS] is kind of going back on what we always thought the intent of the ACA was to begin with.”
Feldpush adds that people who purchase insurance on the exchanges “already became part of the risk pool, so it’s unclear to me how offering them assistance on their premiums skews the risk pool.”
In Wisconsin, Erickson says, work is underway to survey subsidy recipients to see how they used healthcare services, and perhaps bring in the three other health systems that serve that population.
But, she emphasizes, in Wisconsin, the goal wasn’t just to reduce costs of providing expensive care to the uninsured or underinsured. The goal was to get people covered.
“Research tells us that if people are not insured, they’re not likely to see a doctor. There’s value in keeping people connected with healthcare systems.”
Source: Health Leaders Media
http://www.healthleadersmedia.com/content/HEP-304974/Hospitals-Begin-Subsidizing-Exchange-Premiums-via-Third-Parties