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Louisiana insurers to accept funds from federal AIDS program for Obamacare premiums

NEW YORK (Reuters) - Three Louisiana insurers agreed on Monday to continue to accept payments from a federal program for low-income people with HIV/AIDS to cover their Obamacare insurance premiums, the carriers said during a hearing in U.S. District Court.

Earlier this year BlueCross BlueShield of Louisiana, the state's largest carrier, said it would begin rejecting checks from a federal program called the Ryan White HIV/AIDS Program that for decades had helped low-income people with HIV and AIDS pay for both AIDS drugs and insurance premiums.

Louisiana Health Cooperative and Vantage Health Plan, the two other insurers selling Obamacare policies throughout the state, said they would be forced to follow the same strategy.

Louisiana Blue said its policy against third-party payments was designed to prevent fraud. The chief federal agency administering President Barack Obama's Affordable Care Act, however, said it strongly encouraged carriers to accept the Ryan White payments and did not see any potential for fraud.

That led critics to charge the insurer with adopting a policy designed to keep high-medical-cost HIV/AIDS patients off its rolls, something Louisiana Blue denied.

In response to the company's decision not to accept Ryan White payments for Obamacare premiums after this month, Lambda Legal, a civil rights group that works on behalf of gay men and lesbians, filed a lawsuit against it, asking that Louisiana Blue be forced to accept the payments.

At a hearing on Monday, the company said it would accept the Ryan White payments for premiums on behalf of lower-income Louisianans living with HIV through November 15, 2014, when the next open enrollment period begins.

"This will maintain critical health care coverage" for such customers," Scott Schoettes of Lambda Legal said in a statement. "There was a Sword of Damocles hanging over our client and other Louisianans, with these insurers having previously indicated that in just three weeks they would stop accepting the federal Ryan White Program insurance premium subsidies."

Although the three Louisiana insurers got national attention for their refusal to accept Ryan White payments for new HIV/AIDS customers who signed up for coverage via HealthCare.gov, the federal Obamacare portal, in fact Blue Cross Blue Shield of North Dakota has the same policy, said spokeswoman Andrea Dinneen.

"We have never accepted third-party payments for ACA products or any of our products," she told Reuters. "Because we've always had this policy, we did not accept payments from RWHAP pre-ACA" either.

The Louisiana case is East v. BlueCross BlueShield of Louisiana, No.:3:14-CV-00115-BAJ-RLB.

(Reporting by Sharon Begley; Editing by Cynthia Osterman)

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