Hospitals push HHS on O-Care subsidies via charity

The American Hospital Association (AHA) is asking the Obama administration to clearly state its support for charities subsidizing medical expenses for low-income people on ObamaCare's exchanges.

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In a letter Monday, the AHA and the Catholic Health Association (CHA) urged the Department of Health and Human Services (HHS) to confirm that they do not discourage the subsidies by hospital-based foundations and other charitable groups.

"The AHA, CHA and our members will continue to work to enable as many Americans as possible to obtain healthcare coverage," the groups wrote to HHS Secretary Kathleen Sebelius. "The uncertainty created by HHS's actions is limiting our ability to do so."

The issue puts the administration in a tough position, caught between charities and health insurance companies.

Federal health officials had previously advised against third-party subsidies on the exchanges, expressing "significant concerns" with the practice in a document released Nov. 4, 2013.

"It could skew the insurance risk pool and create an unlevel field in the marketplaces," the Centers for Medicare and Medicaid Services wrote at the time. "HHS discourages this practice and encourages [insurance companies] to reject such third party payments."

The document also raised the specter of possible investigation or sanction against groups seeking to provide the subsidies.

Since then, HHS clarified that its objections did not pertain to private, non-profit foundations paying for medical expenses on behalf of the needy. But fresh confusion arose after a pertinent regulation published on March 14 did not include the clarification.

Foundations say they should be permitted to provide additional exchange subsidies as part of their charitable missions. Insurers argue the practice will destabilize the system by drawing in additional sick people.