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By Sharon Begley and Julie Steenhuysen NEW YORK (Reuters) - Hundreds of people with HIV/AIDS in Louisiana trying to obtain coverage under President Barack Obama's healthcare reform are in danger of being thrown out of the insurance plan they selected in a dispute over federal subsidies and the interpretation of federal rules about preventing Obamacare fraud. Some healthcare advocates see discrimination in the move, but Blue Cross and Blue Shield of Louisiana says it is not trying to keep people with HIV/AIDS from enrolling in one of its policies under the Affordable Care Act, also known as Obamacare. The state's largest carrier is rejecting checks from a federal program designed to help these patients pay for AIDS drugs and insurance premiums, and has begun notifying customers that their enrollment in its Obamacare plans will be discontinued. The carrier says it no longer will accept third-party payments, such as those under the 1990 Ryan White Act, which many people with HIV/AIDS use to pay their premiums. "In no event will coverage be provided to any subscribers, as of March 1, 2014, unless the premiums are paid by the subscriber (or a relative) unless otherwise required by law," Blue Cross Blue Shield of Louisiana spokesman John Maginnis told Reuters. AIDS FUNDS EXEMPT FROM FRAUD CONCERNS The dispute goes back to a series of statements from Centers for Medicare and Medicaid Services (CMS), the lead Obamacare agency. In September, CMS informed insurers that Ryan White funds "may be used to cover the cost of private health insurance premiums, deductibles, and co-payments" for Obamacare plans. In November, however, it warned "hospitals, other healthcare providers, and other commercial entities" that it has "significant concerns" about their supporting premium payments and helping Obamacare consumers pay deductibles and other costs, citing the risk of fraud. The insurers told healthcare advocates that the November guidance requires them to reject payments from the Ryan White program in order to combat fraud, said Robert Greenwald, managing director of the Legal Services Center of Harvard Law School, a position Louisiana Blue still maintains. "As an anti-fraud measure, Blue Cross and Blue Shield of Louisiana has implemented a policy, across our individual health insurance market, of not accepting premium payments from any third parties who are not related" to the subscriber, Maginnis said. On Friday, CMS spokeswoman Tasha Bradley told Reuters that, to the contrary, Ryan White grantees "may use funds to pay for premiums on behalf of eligible enrollees in Marketplace plans, when it is cost-effective for the Ryan White program," meaning that having people with HIV/AIDS enroll in insurance under Obamacare could save the government money. "The third-party payer guidance CMS released (in November) does not apply to" Ryan White programs. Maginnis did not respond to further requests, sent after business hours, for comment on CMS's Friday statement. Hundreds of indigent HIV/AIDS patients are dependent on Ryan White payments for Obamacare because they fall into a gap. They are not eligible for Medicaid, the joint federal-state health insurance program for the poor, because Louisiana did not expand the low-income program, and Obamacare federal subsidies don't kick in until people are at 100 percent of the federal poverty level. Before Obamacare, the 1990 Ryan White Act offered people with HIV/AIDS federal financial help in paying for AIDS drugs and health insurance premiums, especially in state-run, high-risk pools. Obamacare, which bans insurers from discriminating against people with preexisting conditions, was designed to replace these high-risk pools. Starting on October 1, AIDS advocates and others in Louisiana "were enrolling anyone and everyone we could" through the Obamacare exchange, said Lucy Cordts of the New Orleans NO/AIDS Task Force. Last month, her clients and those of other AIDS groups began to hear from Louisiana Blue that their enrollments were in limbo because the company would not accept the Ryan White checks for premium payments. The only other carrier that is refusing to accept such payments is Blue Cross Blue Shield of North Dakota, according to a CMS official. North Dakota Blue "restricts premium payment from third parties including employers, providers, and state agencies," said spokeswoman Andrea Dinneen, but "is currently reviewing its eligibility policies with respect to recipients of Ryan White Program funding." 'SURE LOOKS LIKE DISCRIMINATION' Healthcare advocates are worried that the refusal to accept Ryan White payments is an effort by insurers to keep AIDS patients from enrolling in their plans and last month began pressing the issue, including with the office of Democratic Senator Mary Landrieu. In an email reviewed by Reuters, a healthcare expert on Landrieu's staff wrote, "BCBS LA told me their decision was not due to the CMS guidance or any confusion (as we thought before) but was in fact due to adverse selection concerns. I have also recently learned North Dakota's BCBS plan has implemented the same policy." Jessica Stone, the Landrieu staff member, declined to elaborate on the email further or to discuss her interactions with Louisiana Blue. Adverse selection refers to the situation where an insurer attracts patients with chronic conditions and expensive care. Louisiana Blue's action "sure looks to us like discrimination against sick people," said John Peller, vice president for policy at the AIDS Foundation of Chicago. Asked if it were engaging in efforts to avoid adverse selection by refusing to accept Ryan White payments for would-be customers with HIV/AIDS, Louisiana Blue said it was not trying to keep such customers out of its plans. "We welcome all Louisiana residents who chose Blue Cross and Blue Shield of Louisiana," said Maginnis. (Reporting by Sharon Begley and Julie Steenhuysen; Editing by Peter Henderson and Prudence Crowther)