By Julie Steenhuysen
CHICAGO (Reuters) - A U.S. district court judge in Louisiana has temporarily barred Blue Cross and Blue Shield of Louisiana and two smaller insurers from rejecting payments from a federal program intended to help low-income HIV patients buy health insurance.
The insurers named in the case are Blue Cross and Blue Shield of Louisiana, Vantage Health Plan and Louisiana Health Cooperative. They are among a small handful of insurance companies in Louisiana that sell healthcare policies under President Barack Obama's healthcare law.
Blue Cross and Blue Shield of Louisiana, the state's largest insurer, said late last year that it would no longer accept federal Ryan White payments on behalf of individuals with human immunodeficiency virus, which causes Acquired Immune Deficiency Syndrome. Subsequently, the two smaller insurers followed suit.
Brian Jackson, chief judge of the U.S. District Court for the Middle District of Louisiana, on Monday issued a temporary restraining order that compels the three insurance companies to continue to accept federal Ryan White funds to pay insurance premiums on behalf of low-income individuals with HIV who bought one of the companies' plans on the federal health insurance exchanges.
The order expires in 14 days, but Jackson has scheduled a hearing for later on Tuesday to consider a preliminary injunction in the matter. If granted, the preliminary injunction would supplant the temporary restraining order, and would maintain insurance coverage for low-income Louisianans living with HIV.
"We are moving ahead in court to address the legalities of having them pull the rug out from under low-income people with HIV/AIDS," said Susan Sommer, director of constitutional litigation for Lambda Legal, which brought the lawsuit on behalf of John East, a plaintiff living with HIV.
For more than two decades, low-income individuals with HIV have used funds from the federal Ryan White HIV/AIDS Program to buy health insurance.
Late last year, Blue Cross and Blue Shield of Louisiana began rejecting Ryan White payments sent on behalf of impoverished HIV-AIDS patients who had enrolled in one of its Obamacare plans, as did Blue Cross Blue Shield of North Dakota.
The insurers told healthcare advocates that guidance issued by the Centers for Medicare and Medicaid Services, the lead Obamacare agency, prevented them from accepting third-party payments for the new health plans, even when the funds came from a government program.
Earlier this month, the CMS said that guidance did not apply to the Ryan White program. The federal agency also said that it is considering amending rules to require issuers to accept Ryan White payments.
Louisiana Blue, nevertheless, said it will stop honoring Ryan White and other third-party payments for premiums beginning March 1, a policy it said will "safeguard against" potential fraudulent activity from "people who want to game the system."
A spokesman for Blue Cross did not respond to a request for comment on the ruling.
Sommer said Lambda Legal is seeking to proceed as a class action on behalf of all affected people.
In his ruling, Jackson cited the grave risk and potential "irreparable injury" that would befall individuals with HIV who are unable to obtain insurance.
(Reporting by Julie Steenhuysen in Chicago; Additional reporting by Sharon Begley in New York; Editing by Jan Paschal)