MEMORANDUM IN OPPOSITION
FOR IMMEDIATE RELEASE: June 16, 2014
Re: S.7500-A (Hannon)/A.10091 (Cahill) AN ACT to amend the public health law, in relation to requiring health insurers to accept third party payments for coverage.
This legislation, S.7500-A/A.10091, would limit health plans’ ability to restrict health care providers in New York from making third party payment of premiums and cost-sharing made on behalf of Exchange Qualified Health Plans (QHPs) enrollees. Under federal rule, QHPs may, by contract, prohibit third party payments of premiums and cost-sharing apart from some enumerated exceptions. The New York Health Plan Association (HPA) opposes this legislation because it is unnecessary.
The Department of Health and Human Services (HHS) Centers for Medicare & Medicaid Services (CMS) on November 4, 2013 outlined its basic policy regarding third party payment of premiums and cost-sharing obligations, taking an unfavorable view: “HHS has significant concerns with this practice because it could skew the insurance risk pool and create an unlevel field in the Marketplaces. HHS discourages this practice and encourages issuers to reject such third party payments.”
On February 7, 2014, CMS issued further guidance to permit payments for premiums and cost sharing made on behalf of QHP enrollees by Indian tribes, tribal organizations, urban Indian organizations, and state and federal government programs (Ryan White HIV/AIDS Program). This guidance also permitted payments made by private, not-for-profit foundations on behalf of QHP enrollees, but requiring the foundation must satisfy defined criteria that are based on financial status and do not consider the enrollees’ health status, and that the premium and any cost-sharing payments cover the entire policy year. While the guidance permits foundations to make payments in certain instances, the federal guidance also does not prohibit health plans from declining to accept payments from foundations especially in instances where there still may be the potential that such payment results in adverse selection.
There is no need for this legislation in view of the federal rule and guidance. Accordingly, HPA opposes S.7500-A/A.10091.