qotd: Community health centers stuck with unpaid bills for insured patients

Kaiser Health News
Daily Health Policy Report
September 26, 2014

Underinsured ACA Enrollees Strain Community Health Centers

Obamacare enrollees are straining the finances of community health
centers around the country, some health center leaders say. The issue is
that many lower-income patients with insurance coverage through the
federal and state exchanges bought bronze-tier plans with lower premiums
but high deductibles, coinsurance and copayments and no federal
cost-sharing subsidies. When these patients face high out-of-pocket
costs for care that falls below the deductible, they can't afford it.
So the centers are subsidizing that care by offering them means-tested
sliding-scale fees. When the centers, which are not allowed to turn away
patients for inability to pay, try to get the insurers to pay, the
claims are usually denied, and the centers have to write it off as
uncompensated care (Modern Healthcare, Dickson, 9/25).

http://www.kaiserhealthnews.org/daily-report.aspx

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Comment by Don McCanne

One of the advantages of reform that ensures that everyone would have
health care coverage is that safety-net institutions, such as community
health centers (CHCs), could be assured that payments would be made for
the services they provide, ending the continual struggle of funding
these institutions. As it turned out, reform will still leave 31 million
uninsured, perpetuating this problem. But at least those now insured
will no longer stress the budgets of the CHCs. Or will they?

Those purchasing the cheapest plans on the exchanges - the bronze plans
- have an average of only 60 percent of their health care costs covered.
This requires very high deductibles which are not affordable for many of
the low-income individuals purchasing these plans. Because of high
deductibles which are difficult to collect after services are rendered,
many health care providers are requiring payment upfront. Many would-be
patients end up walking away because of the lack of funds.

Where are these people to turn? The CHCs of course. They cannot turn
patients away, so they see them. When the CHCs then bill the bronze plan
insurers, the charges are below the deductibles and so the claims are
denied. They can then turn to the patients to try to collect
means-tested fees that would apply to the deductibles, but such efforts
are often futile, and so the CHCs end up writing off the charges as
uncompensated care.

This is the plight of the underinsured and of the providers who care for
them. With low actuarial value plans and often-inaccessible narrow
networks, underinsurance has become ubiquitous. It is one of the most
serious flaws in health care financing today, not only for the exchange
plans but now also for a rapidly growing percentage of
employer-sponsored plans.

This is just one of thousands of major flaws in our financing system. It
just isn't right. We can fix this by changing to a single payer national
health program. Let's do it. Now.