October 1 marks the official roll out of health exchanges across the country. The purpose of the exchanges are to provide more people the opportunity to purchase insurance at affordable rates through governmental subsidies.
There’s a catch in the health care reform law that has providers nervous about getting paid. The Affordable Care Act has a provision that gives consumers purchasing insurance through the exchanges a 90 day grace period if they don’t pay their premiums before their coverage can be dropped.
The law requires insurers who offer plans on the exchanges to provide a three-month grace period to individuals who have enrolled and have stopped paying their premiums. For the first 30 days after the individual stops paying the insurer must continue to pay claims. But (and here’s the catch) the insurers are allowed to hold claims and not pay for services rendered during the final 60 days which means that providers, like physicians and hospitals are on the hook for providing the services for free because they will have no way of knowing if someone is current or in the grace period.
During the last 60 days of coverage the law allows insurers to not process claims and then deny the claim all together if the premium remains unpaid. Doing so will leave the provider with an unpaid bill even though service was provided under the assumption the patient had insurance.
There’s potential for someone to use the 90 day grace period to their advantage and have 12 months of insurance coverage and only pay 9 months of premiums by taking advantage of the 90 day grace period – they would have coverage for the final three months of the year and not have to pay, thus getting a years worth of benefit but only paying 9 months of premiums.