Every night, Jason Early attaches a catheter in his chest to a machine by his bed that, over the course of nine hours while he sleeps, removes his blood from his body, cleanses it and returns it because his kidneys are no longer able to do the job.
It’s been about 18 months since the 28-year-old Dallas resident started getting dialysis after his kidneys failed as a complication from the Type 1 diabetes with which he was diagnosed as a child.
Like many patients with end-stage renal disease, Early, who is completing a bachelor’s degree in finance at the University of North Texas at Dallas, turned to a charity for financial assistance to cover his health insurance costs.
Such “third-party payments” by nonprofit groups, health care providers and others are controversial. The federal government has expressed concern that providers and organizations they’re affiliated with might be inappropriately “steering” patients to marketplace plans instead of Medicare or Medicaid, for which they are often eligible. The public programs reimburse for the dialysis services at lower rates than most private plans. The efforts by charities have also long been a sore spot with health insurers, who say they encourage sick patients who have expensive health care needs to opt for private coverage.
Insurers suffered a setback recently when a federal judge temporarily blocked a new rule from the Department of Health and Human Services that was set to go into effect Jan. 13. It would require that dialysis centers inform insurers if the centers are making premium payments either directly or indirectly through a third party for people covered by marketplace plans. Insurers would then have the option of accepting or denying the payments.
In granting the preliminary injunction last month, U.S. District Court Judge Amos Mazzant in Sherman, Texas, criticized the government’s administrative process for establishing the regulation and said it hadn’t considered the benefits of private individual insurance or the fact that the rule would leave thousands of patients without coverage.
Insurers were not pleased. “Inappropriate steering and third-party payments increases costs for all consumers, and it risks harm to patients who are often eligible for public coverage options,” said Kristine Grow, a spokesperson for America’s Health Insurance Plans, an industry group. “We continue to urge [the Department of Health and Human Services] to prohibit these payments when there is alternative coverage for patients.”
But patient advocates were delighted. “We thought this was an important win for dialysis patients because it not only spoke to the procedural elements of the rule but to the substance, the potential of dialysis patients to have their coverage taken away,” said Hrant Jamgochian, the chief executive of Dialysis Patient Citizens, an advocacy group and the lead plaintiff in the lawsuit.
Premium assistance has been critical to improving Early’s quality of life. “Without the [American Kidney Fund] assistance I would be living to pay my medical costs,” he said. “They give me an opportunity to get a breather from medical costs so that I can live my life outside of my illness.”
Although some patients, such as Early, are able to undergo dialysis at home, many must spend four hours at a dialysis center three times a week. The process is debilitating and time-consuming.
Many people lose their employer-sponsored health insurance because they are unable to work. Medicare is often an alternative because under the law, people with end-stage renal disease — even those younger than 65 — are generally eligible for coverage.
Others may sign up for private coverage on the exchanges. Some may qualify for Medicaid.
Advocates for kidney patients say coverage on the individual market is better than Medicare for some people. In marketplace plans, the maximum amount that someone can be required to pay out-of-pocket for covered services in 2017 is $7,150. But there’s no cap on beneficiaries’ spending in Medicare, and patients are on the hook for 20 percent of the cost for doctor visits and other outpatient services such as dialysis. Supplemental “Medigap” plans can help cover out-of-pocket costs, but 23 states don’t require insurers to sell those plans to people with end-stage renal disease who aren’t yet 65.
Last year, Early bought an Aetna silver plan with a $1,500 deductible and a $6,000 out-of-pocket maximum on the Texas health insurance exchange. The American Kidney Fund paid the $359 monthly premium. The policy covered all of his diabetes drugs and equipment. By the end of the first month of dialysis copayments, Early reached his spending maximum and the plan paid everything after that.
But Aetna exited several marketplaces this year, including Texas, and Early signed up for Medicare in January. Now he’s responsible for a $134 monthly Part B premium, $65 for his prescription drug plan and $300 a month in copays for drugs. Medicare doesn’t cover the insulin pump he uses, so he’ll have to pay $300 monthly out of pocket for that too. At the moment he’s also paying $478 each month for the basic Medigap “A” supplemental plan available in Texas to patients younger than 65 with end-stage renal disease. The Medigap plan covers his 20 percent coinsurance payments for dialysis and other outpatient care.
He said he’s been told that the American Kidney Fund, a charity that provides assistance to about 20 percent of the more than 450,000 people who are on dialysis and receives funding from dialysis providers, will start picking up his Medigap premiums soon. He hopes so.
“I miss my Aetna plan,” he said.
Sixty percent of the people who receive premium assistance from the American Kidney Fund get help with their Medicare or Medigap plans rather than marketplace or other private coverage, said LaVarne Burton, the president and CEO. Even though the judge’s order doesn’t apply to people in public plans, she hopes it will discourage insurers that are increasingly erecting barriers to third-party payment.
“We want to protect the ability that these individuals have to make the choice that meets their needs,” Burton said.
Please visit khn.org/columnists to send comments or ideas for future topics for the Insuring Your Health column.