By Jim Sanders
The Sacramento Bee, May 22, 2013
A loophole in California’s upcoming health care overhaul could be exploited by families gaming the system or responding to hardship in a way that doctors say could leave a pile of unpaid bills.
A chain of events would create a two-month period during which a family has medical coverage but no insurer must pay its claims.
Nonpayment of premiums for subsidized policies would trigger the oddity: Federal law provides a three-month grace period before cancellation – but insurers are responsible only for the first month.
The U.S. Department of Health and Human Services, in written comments, conceded that nonpayment of premiums would “increase uncertainty for providers and increase the burden of uncompensated care.” But it rejected a handful of proposals for cracking down on families whose policies lapse.
During the three-month grace period, insurers are required to pay claims for the first month, after which policyholders would be asked to pay their doctor’s bill or their insurance premium. If they pay neither, doctors get stuck with the tab.
By Don McCanne, M.D.
This looks like another provision of the Affordable Care Act (ACA) designed specifically to protect insurers, at least partially, from untoward losses.
To protect patients who have financial hardships that prevent them from paying their premiums on time, ACA requires that their insurance remain in force for three months before it can be cancelled for non-payment. Physicians contracted with the insurers providing plans through the exchanges will have to continue to provide services for three months after non-payment begins. The insurers, on the other hand, are required to pay the bills for only the first month. After that, the physicians bear the losses.
This is one more example of the role played by the private insurers in both creating ACA and then in implementing it, taking care of their own interests first.
This particular defect is directly related to the fact that Congress, with the support of the Obama administration, selected a highly flawed model of reform – expanding our fragmented, dysfunctional system of private and public plans.
A much greater problem than this transitional coverage issue for non-payment is what then follows. After three months, the patient may remain uninsured, especially if not eligible for Medicaid. The financial hardship that caused the lapse of insurance in many instances will prevent the person from obtaining any other coverage.
Although we can be angry with the insurers for dumping on the physicians, we should hold greater contempt for the politicians and policy makers who brought us this highly flawed financing system. They know that we could have prevented these problems by enacting an improved Medicare that automatically includes everyone, forever, but they didn’t do it.
We still can, you know.