Opinion: Federal Case Threatens California Dialysis Patients’ Access to Health Insurance

Photo by iStock/Trish233

A 2019 law that imperils dialysis patients’ access to healthcare and may drive thousands of Californians into medical bankruptcy is not dead. In Jane Doe, et al. v. Rob Bonta, et al. (AKA Jane Doe, et al. v. Xavier Becerra, et al.), a case that will affect thousands of low-income California residents, the federal court placed a preliminary injunction on the law in December 2019, just before it was scheduled to go into effect. With states and counties now relaxing their public health orders, the court is likely to rule on Assembly Bill 290 this summer.

California Gov. Gavin Newsom and the state Legislature, with the best of intentions, enacted AB 290 to protect dialysis patients from predatory insurance practices that seem harmful to patients. But the state disproportionately favored the more powerful voice of the insurance industry, which claims that dialysis providers use charities to “steer” low-income dialysis patients into the private insurance market so they can be reimbursed at a higher rate. The truth is that there’s no real evidence of these predatory practices, as noted by the court in the preliminary injunction. Insurance providers fear the cost of dialysis is high enough to impact the price of premiums for the general population.

Patients are the most vulnerable and important stakeholders in this policy problem. As a Doctor of Law and Policy, my research focuses on the patient perspective. They have a lot to share about their medical, financial and quality-of-life needs and their constitutional rights. They’ve even discussed some collaborative opportunities for the insurance industry and patient interests to resolve policy problems. Both government and insurers need to spend more time talking to these stakeholders to find a solution that will avoid negative unintended policy outcomes.

AB 290 penalizes dialysis providers by capping their reimbursement to the Medicare rate when they accept insurance from patients who depend on charity to pay their premiums. (To be fair, those charities are supported by donations from dialysis providers.) The only way the state can enforce this is by requiring charities to disclose their beneficiaries to the state. But the charities must withdraw from the state because this violates the privacy of their beneficiaries and the federal guidelines that dictate their operating procedures.

Without charitable assistance to help pay for private premiums, low-income patients who don’t qualify for Medi-Cal cannot afford to pay their 20 percent share of medical bills under Medicare part B. Those who live just above the poverty line don’t have the tens of thousands of dollars needed annually to cover the Medicare cost-sharing requirement for dialysis alone. These patients talk about having to choose between food and housing with what’s left of their discretionary income. They talk about the comorbid conditions they commonly experience with renal failure and the supplies and treatment that Medicare doesn’t cover. Most importantly, they know they would die within weeks if they lost access to care.

What can we do to make Medicare work better for people on dialysis? Insurance companies can work with patient interest groups to influence Medicare policy; it’s in everyone’s best interest. Expand Medi-Cal for low-income people who don’t currently qualify, or Medigap for the non-elderly on dialysis. Cover more diabetes testing supplies. Recruit more doctors. Increase Medigap open enrollment opportunities. These are only a few of the great policy ideas that patients have. If we can make Medicare work for them, they’d be more inclined to leave the private risk pools or limit their private insurance to supplemental plans. They just don’t want to die or go bankrupt. That’s not a lot to ask.

Jackie Lapacek recently completed her Doctor of Law and Policy at Northeastern University. Her research specializes in dialysis patient perspectives on health insurance options.

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