Scarlet Letters on Insurance ID Cards
Imagine if your approximate income was printed on your health insurance ID card alongside your copay and deductible amounts. Would you consider it an invasion of privacy if staff at doctor’s offices, dentist’s offices, and pharmacies had income-related information? Or worry that you may be treated differently because of it?
The Texas House of Representatives will consider HB 1514 by Representative J.D. Sheffield tomorrow, which would require that health insurance ID cards show that a patient has a subsidy from the Health Insurance Marketplace. Subsidies are only available to people within a specific, low-to-moderate income range.
Scarlet Letters Threaten Patient Privacy
Consumer and patient groups, community health centers, hospitals, and health plans have expressed concerns about the bill related to privacy and discrimination. Earlier this week at a Texas Tribune event, Jamie Dudensing, CEO of the Texas Association of Health Plans, said the bill would put a “scarlet letter” on the insurance ID cards of lower income people, even though they have the same private insurance as others.
That last point is key: people who get financial help with their premiums in the Marketplace have the exact same private insurance as others who buy coverage at full cost. Whether you buy a plan with a subsidy or at full cost, it will have the exact same network of providers and reimburses providers at the exact same rates. But, if HB 1514 passes, health insurance cards for subsidized members will look different even though their insurance coverage is the same.
Advocates are concerned that this will open the door to discrimination against individuals who get subsidies. Even though it shouldn’t happen, some providers may tell consumers that they take Blue Cross, UnitedHealth, or Aetna insurance, for example, but not if you have the subsidy indicator on your card.
Providers Have Valid Concerns, but Plans Have Responsibility
Providers have a valid concern that this bill is meant to address. People who receive Marketplace subsidies are granted a 90-day grace period for premiums before their coverage is cancelled. This grace period is important for keeping lower-income populations enrolled in coverage and receiving continuous health care (if needed), even though unexpected expenses like a car repair can mean getting behind on premiums temporarily.
During the first 30 days of the grace period, providers are reimbursed for any care they provide. But if the health plan member falls too far behind on premiums, coverage may be cancelled, and the provider could be on the hook for care provided in the last 60 days of the grace period.
The bill’s proponents argue that the subsidy identification on the insurance card will allow providers to educate all subsidized patients on the importance of paying premiums to reduce this potential liability. But this approach puts the responsibility on the provider to educate a large population of people, most of whom are unlikely to get behind on premiums, and fewer still will get behind for so long that their coverage is cancelled. The risk that insurers will need to recoup payments for care provided in the last 60 days of the grace period is low.
There is a fair solution. Other states like Louisiana and Washington make it the health plans’ responsibility to identify to providers the individuals who have actually gotten behind on their premiums. Nearly all doctors and other care providers routinely check to make sure each patient’s coverage is in effect every time they get care, and other states require insurers to notify providers during these checks if a patient is in the first 30 days or the 60-day zone. This approach would prevent discrimination because providers would target their education efforts to the patients who could conceivably generate a liability, and it protects the privacy of all patients.
Scarlet letters on insurance cards could make it harder for lower-income people to get health care, and do nothing to provide information to providers on which patients might be behind on paying premiums. We hope the Texas House finds a better way forward for providers and patients.