Insurers block Obamacare coverage to poor HIV patients in La.

Close to 2,000 poor Louisiana residents with HIV/AIDS won’t be able to buy coverage under Obamacare because three of the four companies in the state offering coverage through the federal insurance exchange won’t accept payments from a federal program that helps those patients pay their premiums.

The fourth company, Humana, accepts third-party payments from state and federal programs or grantees such as the Ryan White HIV/AIDS Program, spokesman Mitchell Lubitz said. However, Humana’s offerings through the Obamacare marketplace are only available in Orleans Parish.

Scott Schoettes, HIV project director at Lambda Legal, said the insurance companies’ actions completely defeat the purpose of the Affordable Care Act.

Schoettes said it’s not surprising that other insurers respond when Blue Cross and Blue Shield of Louisiana, the state’s largest insurer, skews the market by denying coverage to people the company knows have significant health needs. The other insurers will take whatever actions they can to avoid having those patients pushed onto their rolls, he said.

In the business, enrolling a disproportionately high percentage of high-cost individuals is known as “adverse selection.”

Billy Justice, a spokesman for Vantage Health Plan in Monroe, said smaller health insurance companies have no choice but to follow Blue Cross’s lead.

Eric Evans, advocacy coordinator at Shreveport’s Philadelphia Center, said the Louisiana Health Cooperative has already informed some center clients the co-op will not accept third-party payments.

Officials with the cooperative could not be reached for comment.

Blue Cross spokesman John Maginnis said beginning March 1, the company will not accept third-party payments for individual members’ premiums.

Blue Cross covers 1.4 million people in Louisiana, the vast majority through group policies. Only 139,000 are covered by individual policies.

Third-party payment recipients are a very small percentage of the company’s individual policies, which are a very small percentage of the company’s total business, Maginnis said.

“We realize that some organizations have directly paid premiums for members in the past …. Those organizations can still provide the members with financial support toward their premiums, but they must let the members make the premium payments directly for their health insurance policies,” Maginnis said.

For example, the groups that now make the third-party payments could make grants to their clients, who could then use that money to pay health care premiums, he said.

The federal Health Resources and Services Administration, which oversees the Ryan White program, does not allow states, cities and nonprofits who receive funding to make payments to individuals.

“In no case may Ryan White HIV/AIDS Program funds be used to make direct payments of cash to recipients of services,” the agency website says.

Maginnis said Blue Cross, which is the only insurer fully participating in the federal marketplace with plans at every level in every parish, developed the policy to prevent patient steering and other fraudulent activity.

Some providers and medical equipment suppliers will steer people to specific health plans and offer to pay the premiums so they can make more money by billing the insurance company for those patients’ covered services, Maginnis said. This kind of activity can increase health care costs for everyone.

The insurer’s policy affects more people than those receiving Ryan White funding, he said. Some Louisiana universities pay for student athletes’ premiums.

LSU spokesman Michael Bonnete said Blue Cross’s policy change does not affect LSU athletics.

According to the state Department of Health and Hospitals, as of Jan. 7, Louisiana used Ryan White funds to pay the insurance premiums for 1,355 people. An additional 493 were enrolled in the federally run Pre-Existing Condition Insurance Plan, which will stop offering coverage on March 31.

In addition, 329 individuals attempted to enroll in Blue Cross’s Blue Plan with the intention of covering the premiums with Ryan White funds, according to DHH.

Schoettes said it’s increasingly clear that Blue Cross is trying to avoid covering these high-cost patients.

The company made noises about preventing fraud or abuse, but CMS’s most recent instructions make it clear third-party payments coming from the federal government are acceptable, he said.

Evans said the issue is much larger than rejecting third-party payments.

“This is them saying, ‘We really don’t want to insure people with HIV because there’s no profit in it,’” Evans said.

The prescriptions for an HIV patient can cost $5,000 or $10,000 a month, Evans said. Those costs far outweigh the premiums patients pay, but insurance companies have known about this for decades.

America’s Health Insurance Plans recently issued a brief noting: “The ACA’s risk adjustment program is designed to spread risk among health plans to prevent problems associated with adverse selection. Under this program, health plans that enroll disproportionately higher risk populations (such as individuals with chronic conditions) will receive payments from plans that enroll lower risk populations.”

People forget that the first two words in the Affordable Care Act’s full title are “Patient Protection,” Evans said. The law was designed to stop insurance companies from discriminating against people with pre-existing conditions.

Schoettes said Lambda is considering amending its complaint to include the other insurers who reject third-party payments.

The nonprofit group may also file a lawsuit, among other steps, if the complaint doesn’t achieve the desired result, he said. Lambda hasn’t set a deadline to file the lawsuit.

“Sooner rather than later because every day that goes by is another day where low-income people living with HIV don’t know where to turn and don’t know where they’re going to get their insurance,” Schoettes said.

Evans said the scary thing is that the full impact of Blue Cross’s decision won’t be seen until after March 1, just weeks before the Affordable Care Act open enrollment deadline of March 31.

“Then what are these people going to do for the next year?” Evans said. “It’s very frustrating and very angering.”