What happens when you can’t pay your health insurance premium?
This post is about what to do if you have trouble paying your insurance premiums during the COVID-19 health emergency. If you have lost your insurance coverage altogether, you can learn what to do here.
During this difficult time of the COVID-19 outbreak, millions of Americans have lost their sources of income and, with it, their ability to pay for essentials including health insurance. Access to health insurance is always important but it is especially important now. Health insurance provides coverage for the network of doctors, nurses, and other health care providers you visit—not only for primary care, but also for testing and treatment of the coronavirus. Individuals with chronic illnesses, like diabetes and high blood pressure, need to remain insured not only because they are more at risk for a severe case of COVID-19, but also because these underlying illnesses cause of 75% of new cases of kidney failure. Insurance is very important for continuity of care to ensure that chronic illnesses are addressed.
What happens when you can’t pay the premium for your health insurance? Most health insurance plans have a grace period, which means you can continue to see your doctors for a specific amount of time before your policy is canceled. In these cases, you have a short amount of time to pay your premium after the due date. During the COVID-19 outbreak, there are some special regulations regarding grace periods. The federal government has taken a small step by allowing—but not requiring—insurers who offer qualified health plans (QHPs, also known as Affordable Care Act or Obamacare plans) to offer a grace period to patients. Many states have taken additional action to require insurers to offer grace periods for the health insurance plans that they regulate, which can include QHPs, small group health plans, employer group health plans and Medigap plans.
Has your state taken action?
In the absence of federal action, several states have released bulletins directing insurance companies to provide grace periods, meaning a patient’s health insurance will not be canceled due to nonpayment during the COVID-19 emergency. These state directives also generally require the insurer to allow patients to pay the back premiums in installments once the emergency is over.
You can find out if your state has directed your health insurance company to offer a grace period by looking at the National Association of Insurance Commissioners’ state database of COVID-19 Bulletins.
What if your state has not taken action?
On March 24, 2020, the Trump Administration released a memo to health insurance companies that sell QHPs through the Marketplaces/Health Insurance Exchanges which stated he would allow insurers to extend the due date for initial premium payments for new enrollees if they choose and had state approval. The memo basically states that insurance companies may delay the due date, but they are not required to. The grace period for QHPs will be unchanged unless insurers or states act. Consumers who receive advance premium tax credits (APTC) that reduce the cost of their insurance have three months to pay their full initial premium unless their state mandates otherwise or the insurance company changes its policy.
Insurers must pay all claims filed during the first month of the APTC timeframe. For the second two months of the grace period, insurers hold claims instead of paying them, and notify the providers that the patient has not paid the premium. If the patient has not paid the premium after three months, the insurer will disenroll the patient.
For patients who do not receive APTCs, the grace period is regulated by the state and is usually 30 days.
Most dialysis patients have Medicare. Many also need a Medigap (Medicare Supplemental Insurance) plan to help cover their out-of-pocket costs. Federal consumer protections in Medigap only apply to Medigap plans offered to people age 65 and over. The states regulate most aspects of Medigap, including whether insurers must offer these plans to Medicare beneficiaries under the age of 65. There has been no federal direction on expanding grace periods for Medigap plans. The grace period for Medigap plans is 31 days from when payment was due. Some states have acted to expand the grace period of Medigap plans.
COBRA allows recently terminated employees to keep their employer’s health insurance coverage for 18 months by paying the entire health insurance premium (the employer’s share plus the former employee’s share). This option is named for the legislation in which it enacted: the Consolidated Omnibus Budget Reconciliation Act of 1985 (COBRA). The option is open to people who have voluntarily or non-voluntarily left their employer, as long as the employer has 20 or more employees and provides insurance to its employees. Former employees have up to 60 days to enroll in COBRA. Once a former employee is enrolled in the COBRA plan, they are usually required to pay the premium monthly and the grace period is usually 30 days.
If you can no longer pay your COBRA premiums, you will probably only have the 30-day grace period before your plan is permanently canceled. There have been no new federal or state policies that require insurers to postpone or delay the cancelation of COBRA coverage due to nonpayment. In these cases, it would be important to look for other insurance, like a QHP or Medicaid.
Some insurers have opted to expand premium grace periods on their own. For instance, Florida Blue has extended the grace period until May 31, 2020. They are applying the grace period to all their lines of business, including Medigap, Exchange plans, individual market and employer group markets. You can call your insurer to see if they have extended the grace period, and if they are allowing premiums to be paid over time when you get back to work.
How is AKF fighting for patients who’ve lost insurance or are having trouble paying premiums?
The American Kidney Fund is requesting that several insurance provisions be included in coronavirus relief legislation. We are requesting that the federal government open a special enrollment period for QHPs bought on the Marketplace/Exchange so people who were not insured can gain insurance. We are requesting additional funds and incentives to expand Medicaid in the states that have not yet expanded Medicaid. We are also requesting a grace period for Medigap plans, as well as a 65% subsidy for COBRA payments. The 65% subsidy would be like one created during the 2008 financial crisis to help people keep their insurance. A similar subsidy now would be helpful for patients who want to keep their current health plan because they can see specific doctors and have continuity of care.
You can help us make sure the insurance needs of kidney patients are considered in the next piece of coronavirus relief legislation by taking just two minutes to email your elected officials here.
This information is current as of April 30, 2020. You can find more information and resources for kidney patients by visiting our special coronavirus webpage at KidneyFund.org/coronavirus. AKF will update the page with important information for kidney patients and their caregivers as the coronavirus crisis continues to unfold.