Last year I wrote that Obamacare could leave doctors holding the bag for claims for patients who don't pay their insurance premiums. That's because the law includes a three-month grace period during which health insurers must continue to cover patients who sign up, but don't pay the price of their insurance. If the patients eventually make good, there's no problem. But if patients don't pay the owed premiums, the insurance company has to cover the cost of claims filed during the first month. Providers are stuck with the tab for any claims filed during months two and three.
The piece I wrote last July was theoretical. The notification letter I'm holding in my hand, addressed to my wife's pediatric practice, is reality. And reality costs, in this case, over $600. That's the outstanding balance owed the practice by a patient insured by BlueCross BlueShield of Arizona. It's a balance that my wife might have to eat, or else try to collect herself.
Here's the letter, from which my wife redacted all identifying information before showing it to me.
Under the Patient Protection and Affordable Care Act (PPACA), if an individual purchases health insurance through the Individual Marketplace and receives a subsidy to assist with premiums, there is a three month grace period in which the individual can make premium payments. During this period, insurance companies may not disenroll members, issuers must notify providers as soon as practicable when an enrollee enters the grace period and, during the second and third months of the grace period, they are required to notify providers that claims incurred in the second and third months may deny if the premium is not paid.
The member referenced above purchased health insurance through the Marketplace and currently receives a subsidy to assist with premiums. This letter is a courtesy notification to make you aware that this member and any covered dependents are currently in the 3rd month of their grace period.
What this means to you
- This claim was incurred during the second or third month of the member's grace period and was pended. All individual claims under this contract are also in the second or third month of their grace period.
- Any additional claims incurred during the second and third month of the grace period may be pended until the full premium due is paid by the member.
- If the premium is paid in full by the end of the grace period, and pended claims will be processed in accordance with the terms of the contract.
- If premium is not paid in full by the end of the grace period, any claims incurred in the second and third months may be denied. If claims incurred in the second and third month are denied due to non-payment of premium, you may seek reimbursement directly from the member.
The American Medical Association (AMA) has more information about the grace period here, though the letter above covers the high points. Given the potentially high costs providers can face when the insurance coverage they process for patient care turns out to be more of a conditional suggestion than a firm guarantee, the AMA also offers physicians guidance, and urges them to enter into financial agreements with patients who receive subsidized care. The idea is to get them to promise to pay their own bills if they stiff the insurance company.
Of course, those patients promised to pay their insurance companies, too.