By Sharon Begley
NEW YORK (Reuters) - The only three insurance companies in Louisiana that sell healthcare policies under President Barack Obama's healthcare law throughout the state are rejecting payments from a federal program intended to help low-income HIV patients, advocacy groups said on Thursday.
The Louisiana Health Cooperative and Vantage Health Plan, two smaller insurers, made the move following a decision by the state's largest insurer, Blue Cross and Blue Shield of Louisiana, late last year to reject the payments.
Lambda Legal, a non-profit group, filed a civil rights complaint about the two smaller carriers' action with the Obama administration on Thursday, following a similar complaint about Louisiana Blue last week.
"Additional carriers are jumping on the discrimination bandwagon," said Susan Sommer, director of constitutional litigation for Lambda Legal, which works to protect the civil rights of lesbians, gay men, and people with HIV. "The worst nightmare for people with HIV-AIDS is coming true in Louisiana: they're being turned away in what's become a race to the bottom by insurers."
The issue involves the federal Ryan White HIV/AIDS Program which, for 23 years, has made grants to states, cities and nonprofit organizations to help low-income people with HIV purchase health insurance.
The organizations assumed the federal money could be used to pay premiums for Ryan White beneficiaries who purchased private coverage on insurance exchanges created by the Affordable Care Act (ACA), just as the funds had been used to pay premiums previously.
In recent weeks, however, Blue Cross and Blue Shield of Louisiana began rejecting Ryan White payments sent on behalf of impoverished HIV-AIDS patients who had enrolled in one of its Obamacare plans, as did Blue Cross Blue Shield of North Dakota.
The insurers told healthcare advocates that guidance issued by the Centers for Medicare and Medicaid Services, the lead Obamacare agency, prevented them from accepting third-party payments for the new health plans, even when the funds came from a government program.
That guidance, issued in November, was meant to prevent self-dealing or even fraud. "The worry was that a hospital, for instance, would sign up and pay (Obamacare) premiums for their uninsured patients," said law professor Mark Hall of Wake Forest University. If a hospital also steered patients toward an insurer that includes it in its network, the hospital would turn a charity patient into a paying one, something CMS regards as a form of prohibited self-dealing.
Last week, CMS said the ban on third-party payments "does not apply" to those made on behalf of Obamacare enrollees by "state and federal government programs or grantees (such as the Ryan White HIV/AIDS Program)."
Over the weekend, CMS went further, said it "is considering amending the rules to require," and not merely allow, "issuers to accept these (Ryan White) payments."
On Thursday, Louisiana Blue nevertheless said it will stop honoring Ryan White and other third-party payments for premiums beginning March 1. The policy, it said, is "a safeguard against ... patient steering and other fraudulent activity," adding that it knows "from experience that there are people who want to game the system."
Louisiana Health Cooperative has said it "will not be accepting third-party insurance premium payments either," said Lucy Cordts of the NO/AIDS Task Force. Her group, which advocates on behalf of people with AIDS, has an estimated 350 Louisiana residents who chose Coop plans. "They'll all now need to consider another company."
Other healthcare advocates said they had informed Louisiana Health Cooperative officials that CMS allows Ryan White payments to be used for Obamacare insurance premiums, and were told that "they would not change their policy unless required," said Moriba Karamoko, director of the Louisiana Healthcare Coalition.
Coop spokeswoman Anisha Williams declined to comment.
The third carrier selling Obamacare insurance throughout Louisiana, Vantage Health Plan, informed the state that it, too, will not accept Ryan White payments. A spokesperson for the physician-founded company did not return messages seeking comment.
Insurance experts point out that once one carrier in a market institutes policies that drive away potentially high-cost customers such as people with HIV-AIDS, other carriers feel pressure to do the same for fear of being the only one to cover them, a situation called adverse selection.
Last week, Lambda Legal filed an administrative complaint with the Office of Civil Rights of the U.S. Department of Health and Human Services, CMS's parent agency, against Louisiana Blue. On Thursday it filed complaints against Vantage and Louisiana Health Cooperative, arguing that their refusal to accept Ryan White payments flouted a key provision of the ACA, namely its requirement that insurers accept any customer regardless of health status.
"What we're seeing in Louisiana is a crisis for low-income people with AIDS," said Lambda Legal's Sommer. "These are exactly the people the Affordable Care Act was designed to provide a safety net for."
One patient who enrolled in a Louisiana Blue plan learned in December that the insurer would not accept Ryan White checks for his premiums.
"So now I am without insurance," said Mark, 44, a former high-school teacher who is unemployed and asked that his last name not be published. He was able to obtain HIV medications from the NO/AIDS Task Force, through the Ryan White program. But he cannot afford medications for high cholesterol and high blood pressure that are common side effects of HIV drugs.
"My health is in danger at this point," he said. "If we sit back and let them do this, it goes against everything the Affordable Care Act is about."
(Reporting by Sharon Begley; Editing by Michele Gershberg and Richard Chang)