NEW YORK, March 14 (Reuters) - The lead agency for President Barack Obama's healthcare reform announced on Friday that it would require, rather than merely encourage, insurers that sell Obamacare policies to accept funds from a federal program that helps people with HIV-AIDS pay health insurance premiums.
Earlier this year, BlueCross BlueShield of Louisiana, the state's largest carrier, said it would begin rejecting checks from the Ryan White HIV/AIDS Program for Obamacare policies it sells. For decades the Ryan White program had helped low-income people with HIV and AIDS pay for both AIDS drugs and insurance premiums, but Louisiana Blue said such "third party payments" invited fraud.
The chief federal agency administering Obamacare, the Centers for Medicare and Medicaid Services, said on Friday it was requiring insurers to accept the funds, after saying last month that it "encouraged" carriers to accept the Ryan White payments and did not see any potential for fraud.
"Given the importance of access to care for people with HIV/AIDS, today CMS amended its rules to require health insurance issuers to accept Ryan White HIV/AIDS Program funds on behalf of eligible enrollees in individual Marketplace plans," said a CMS spokeswoman. "We will work directly with issuers to ensure they are in compliance with this policy."
Although the controversy over the Ryan White payments attracted the most attention, the CMS rule also requires insurers to accept premium payments on behalf of Obamacare customers from Indian tribes, tribal organizations, urban Indian organizations, and state and federal government programs.
After CMS had encouraged acceptance of the funds, Louisiana Blue had said it would not take the Ryan White payments after this month, threatening hundreds of customers with loss of coverage due to inability to pay. Lambda Legal, a civil rights group that works on behalf of gay men and lesbians, filed a lawsuit against the company, asking a court to require Louisiana Blue to accept the payments.
On Monday the company said it would do so, but only through Nov. 15, 2014, when the next open enrollment period for Obamacare begins. The current enrollment period, for coverage in 2014, ends on March 31.
Friday's CMS announcement means that Louisiana Blue and all other carriers will have to accept the Ryan White payments for premiums.
If an insurer refuses to comply with the interim final rule, CMS said, the organization that submitted the payment or the affected individual should contact CMS. If a company continues to refuse, CMS might levy a penalty, it said, without specifying its size.
Reporting by Sharon Begley; Editing by Leslie Adler