In early May, the U.S. Department of Labor announced that the April unemployment rate reached 14.7-percent, and a Forbes article claimed that number could grow to 30-percent as a result of the ongoing health crisis. In addition to lost wages, these same people are finding themselves without health insurance during the Coronavirus pandemic, leaving them struggling to find ways to continue paying healthcare premiums through COBRA or other offerings.
This is impacting hospitals that are trying to stretch every dollar to stay solvent while dealing with COVID-19, which is not an easy task. Combine that with patients who are finding themselves newly unemployed with no insurance, the level of care can decline – but it doesn’t have to.
Some patients may be eligible for Medicare or Medicaid, which can provide some coverage, while others could qualify for plans under the Affordable Care Act (ACA). Hospitals may also bill the patient in the hopes that they elect to pay for COBRA (Consolidated Omnibus Budget Reconciliation Act) coverage.
But what if none of these options work or the patient is unable to afford their COBRA payments? Hospitals may consider helping cover these costs through their foundation or other charity entity to ensure a higher payout from the commercial insurance company. Paying a few thousand dollars to receive several times that amount for care can be a way to stay closer to the black. An article by BLR titled, “COBRA Continuation Coverage: Who Pays?” laid out several examples where someone other than the beneficiary pays premiums, including hospitals and Medicaid. In the article, it states that,
“Although COBRA does not require that employers pay for COBRA coverage, COBRA also does not require that a qualified beneficiary actually be the one to pay for coverage–that is, someone else can pay for the qualified beneficiary’s coverage.”
This is not to say you should start paying for every person that walks through the door. To the contrary, you need to review each situation to ensure you are following the correct path. In a Linkedin article, Brent D. Magers, Executive Associate Dean, Texas Tech University HSC School of Medicine, says that,
“any provider that wishes to pay the health coverage premiums for an individual should consider the type of health care coverage, the legal structure of his or her entity that is seeking to provide such payments, applicable state laws and insurance contract terms. Finally, tax-exempt entities should also think of private benefit issues.”
He also gives further advice on having clear policies and procedures to guide the entire process while also securing the approval of legal and compliance professionals before starting this practice, so be sure to work with your legal department to avoid trouble later on.
At Americollect, we understand that a larger segment of your patients may be dealing with COBRA coverage for the first time. We reviewed our already Ridiculously Nice COBRA information and added new training for our staff designed to help first-time COBRA patients better understand their rights and how it works. By taking the time to talk with them, we hope to maximize the use of COBRA during the COVID-19 pandemic, which will positively impact your bottom line.
There are many things to consider when it comes to paying COBRA premiums for your patients, but as COVID-19 continues to impact our world, it may be worth your time to consider this option when working with patients that unexpectedly find themselves without insurance coverage.