People around the world are understandably nervous about COVID-19, also known as the Coronavirus. To date, nearly 900,000 people have tested positive for the rapidly-spreading respiratory illness, and the world-wide death toll now tops 40,000. In the United States, more than 190,000 cases had been reported as of April 1, with at least 4,000 deaths according to Worldometer, which tracks cases in real time. Unfortunately, all of those numbers are expected to rise.
Fear over the outbreak has caused the stock market to nosedive, the CDC to issue warnings against non-essential travel, schools and universities to cancel classes, and stores to sell out of hand sanitizer and disinfectant. It is also prompting questions about who will pay for Coronavirus testing and treatment.
The short answer to those questions is “it depends.” The longer answer is that some people have health coverage through a public program like Medicare or Medicaid, some have group coverage through their employer, and some have individual policies. The policies are purchased in different states, and some are fully-insured while others are self-insured. Whether testing and treatment will be covered by the health plan and what the cost sharing will look like will vary by location, by type of policy, and even by insurer.
And the truth is that coverage decisions are still being made, so, several weeks into this crisis, this is a very fluid situation. Here’s what we know right now:
On March 3, 2020, Medicare.gov announced in a blog post that Coronavirus testing will be covered under Medicare Part B. Here’s an excerpt from the announcement:
You may be hearing about the coronavirus (officially called 2019-novel coronavirus or COVID-19) in the news. While there isn’t a vaccine yet, Medicare is still here to help. Medicare Part B (Medical Insurance) covers a test to see if you have coronavirus. This test is covered when your doctor or other health care provider orders it, if you got the test on or after February 4, 2020.
You usually pay nothing for Medicare-covered clinical diagnostic laboratory tests. Note: Your provider will need to wait until after April 1, 2020 to be able to submit a claim to Medicare for this test.
Since that time, Medicare has set up a Coronavirus Resource Page that you might want to share with your Medicare-eligible clients. It contains a number of tips to help slow the spread and to stay healthy and succinctly explains that both testing and treatment are covered under Medicare:
- Medicare covers the lab tests for COVID-19. You pay no out-of-pocket costs.
- Medicare covers all medically necessary hospitalizations. This includes if you're diagnosed with COVID-19 and might otherwise have been discharged from the hospital after an inpatient stay, but instead you need to stay in the hospital under quarantine.
The Centers for Medicare and Medicaid Services (CMS) has released a fact sheet about Medicaid and CHIP coverage and benefits related to COVID-19. The sheet points out that Medicaid and CHIP are administered by the states and that the programs “provide comprehensive benefits to people who are determined eligible by states,” but it stops short of saying that Coronavirus testing and treatment will be covered. Still, the assumption is that Medicaid will pick up the cost, especially following Vice President Mike Pence’s statement on March 4, 2020, as reported by CNBC, that the test “will be covered by Medicare and Medicaid.” Still, people with Medicaid may want to check with their state to confirm how the test and any other expenses will be handled.
Private Health Plans
In the same statement on March 4, Vice President Pence said that “HHS has already denominated a test for the coronavirus to be an essential health benefit, which ensures that it will be covered by people’s private health insurance.” However, Kaiser Health News and Politifact rated the vice president’s statement as a half-truth for a couple reasons. First, not all plans cover all essential benefits. Essential health benefits must be covered in fully-insured individual and small group health plans, not large group plans or self-insured plans. Also, just because a benefit is “covered” by a plan does not mean there is no cost sharing. In fact, many covered benefits are subject to the calendar-year deductible, which can make them cost-prohibitive for some members.
With that said, most fully-insured plans, even large group plans, will cover the cost of testing 100%. And, in recent days, several large insurers have announced that they will also cover the cost of treatment with no cost-sharing. As reported by Forbes, President Trump announced that “Cigna and Humana are waiving customer cost-sharing and co-payments for all treatments related to the Coronavirus strain COVID-19” in his daily briefing on Sunday, March 29. This follows a report by ABC News that Aetna, now owned by CVS Health, “is waiving patient payments for hospital stays tied to the coronavirus.” Time will tell if other insurers make a similar coverage decision.
America’s Health Insurance Plans has a web page that summarizes how many fully-insured plans across the country are paying for COVID-19 testing and treatment: https://www.ahip.org/health-insurance-providers-respond-to-coronavirus-covid-19/
In some cases, the state is making this decision for the carriers. For instance, at several states have directed insurance companies to waive deductibles, copays or coinsurance for COVID-19 testing for any fully insured policy in their state. Below are links to some of the state guidance:
- CA: Statement from Governor | Statement from Insurance Commissioner
- NY: Statement from Department of Financial Services
- WA: Statement from Insurance Commissioner
- MD: Statement from Insurance Administration
Additionally, some insurers are making the decision to cover the cost of testing on their own without any state directive. For instance, Cigna made this announcement on March 5 while Health Care Service Corporation, which operates Blue Cross Blue Shield plans in a number of states, announced on March 6 via email that the company “will not require prior authorization and will not apply member co-pays or deductibles for testing to diagnose COVID-19 when medically necessary and consistent with Centers for Disease Control guidance.” As for treatment, HCSC says its “plans cover medically necessary health benefits, including physician services, hospitalization and emergency services consistent with the terms of your benefits,” which means that a decision to waive cost sharing associated with treatment has not been made at this time.
It is likely that additional announcements from other states and other insurers will be made in the coming days.
Again, Kaiser Health News (KHN) points out that the essential health benefit “requirements don’t apply to many workplace plans (including those provided by large businesses and self-insured plans), even though most Americans ― about 157 million ― who have health insurance get it through their job.” While most large group and self-insured plans “do cover a wide range of benefits, including laboratory services,” there is no requirement that they do so.
And, at the time, there was not requirement. However, as explained in email from Health Care Service Corporation, which operates Blue Cross Blue Shield plans in a number of states, to its self-funded ASO groups on March 27, the government is not requiring self-funded plans to cover COVID-19 testing: “The Families First Coronavirus Response Act (FFCRA), which was enacted on March 18, 2020, requires self-funded businesses to provide coverage (FFCRA coverage) for COVID-19 testing and related services.” This mandate “will remain in effect until the public health emergency is declared over by the federal government.”
Other decisions, like whether to waive member cost-sharing on telehealth services or COVID-19 treatment, will be up to employers who operate self-insured plans. Given the cost of treatment, this is a big decision for self-funded businesses.
At AHCP, we do write a lot about short-term, limited duration health insurance as a good alternative for healthy individuals who cannot afford coverage in the individual market, but we’re always careful to mention that these plans are not required to cover the essential health benefits. Kaiser Health News makes a similar point: “The ACA’s rules―including those on essential benefits―don’t apply to several types of insurance that the Trump administration has promoted, including short-term plans.” This means that the cost of Coronavirus testing may not be included in some of the policies you’ve been recommending to your clients, even if the state says that fully-insured plans must cover the cost. Still, carriers that provide short-term coverage may make the decision on their own to provide coverage for testing and treatment; be sure to check with your carriers to confirm how they are addressing these issues.
Last but not least, the Kaiser Health News article does discuss a big problem that state and federal officials need to consider, and that’s what to do about the uninsured population. As KHN says, “The potential for out-of-pocket costs poses a barrier to getting tested for people who are uninsured and may be infected with COVID-19.” And this is a challenge, of course, because we want anyone who might have been exposed to the Coronavirus to be tested; that’s how we keep it from spreading.
More to Come
As we said at the beginning, this is a developing story, one with numerous implications for the health insurance industry, so we will be sure to update you as we gather more information. Now is a great time to keep up with the AHCP Blog.