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Insurers Back to Billing for COVID-19 Care

Medicare continues to offer many free services to treat the illness

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A year ago, at the height of the COVID-19 pandemic, insurance companies were likely waiving deductibles and copays if you were hospitalized with the illness and had comprehensive coverage. And the government required those firms to cover coronavirus testing for free as well.

But nearly two years into the crisis, 72% of the nation's largest insurers are back to business as usual and billing hospital patients who are being treated for COVID-19 just as they would for any other disease, according to a report from the Kaiser Family Foundation (KFF). Another 10 percent of insurers plan to start billing by the end of October.

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Why did insurers waive COVID-19 charges to begin with and what has changed?

Behind the waived copays

When the pandemic swept the nation in early 2020, hospitals quickly filled up with COVID-19 patients, overwhelming health workers and causing panic.

In the face of this crisis, private insurers began waiving certain charges hospital patients with COVID-19 would normally have been responsible for. Maybe this was because they wanted to do the right thing or perhaps they worried about the potential public relations fallout of seeming to make profits from the crisis, said Krutika Amin, a KFF associate director and a coauthor of the Aug. 19 report.

Also, while hospitals filled up with COVID-19 patients, elective surgeries and other procedures that would bring people into hospitals were postponed. There weren't enough beds for those patients and health care officials were worried about the spread of the illness.

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The result: pverall health care use and costs dropped compared to previous years, Amin said. That meant insurers were paying out less in claims. But it also meant that these plans were not adhering to a federal law that requires them to spend a certain portion of premiums they receive on medical care, Amin said.

“If medical claims are lower than the required percentage, then health insurers have to pay rebates to consumers,” she said.

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So instead of paying rebates, the insurers fulfilled their responsibilities to put premium dollars back into patient care by waiving COVID-related copays, deductibles and coinsurance. A total of 88 percent of people enrolled in private health plans would've had their out-of-pocket charges paid for if they had to be hospitalized with COVID-19, the KFF report found.

This waiving of payments is unusual, Amin added. “Insurers in the past may have done something like this, but nothing of this magnitude."

Charges start kicking in

With the widespread availability of the COVID-19 vaccines in early 2021, people had a proven tool to ward off severe illness and hospitalization. Hospitalizations from the pandemic began dropping, patients with other medical needs began being admitted and elective surgeries resumed. That raised the question of whether charges should be waived for one condition and not another, said Amin at KFF. “Other people, those with cancer, they don’t get their costs waived.”

So more insurers have begun charging deductibles and copays. But it’s important to remember COVID-19 treatments continue to be covered, said Kristine Grow, senior vice president of communications at America’s Health Insurance Plans (AHIP), the trade association for health insurers. “Health insurance providers are still covering hundreds or thousands of dollars of a patient’s treatment costs, depending on the severity of their illness,” Grow said.

The median length of stay for a general COVID-related hospitalization was three days, climbing to seven days for patients with complex conditions, needing a ventilator, care in an intensive care unit, or both, said Dean Sicoli, spokesman for FAIR Health, an independent organization that tracks health care costs.

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FAIR Health found that the average charge for a complicated U.S. COVID-19 hospital stay is $317,810. But hospitals end up receiving an average of $98,139 in payments from insurers and patients, according to a September report. The amount paid by a patient can vary widely from plan to plan, driven by specific cost-sharing provisions and such factors as whether patients have fulfilled their deductibles, Sicoli said.

Insurer approaches vary

Kaiser Permanente began waiving out-of-pocket costs on April 1, 2020, for members with positive COVID-19 diagnoses, said spokeswoman Elizabeth Schainbaum. Consumers did not have copays or other costs related to their care, including hospital stays, she said. That policy ended on July 31, 2021.

“This waiver was conceived as a temporary measure, and our waiver remained in place longer than others. The charges were restored because the economy has improved and vaccines are readily available,” Schainbaum said.

Aetna began waiving its cost-sharing in March 2020 for its members for inpatient treatment of COVID-19 or associated complications, said spokesman Ethan Slavin. That policy ended on Feb. 28, 2021.

In April 2020, the Blue Cross Blue Shield Association announced that its member companies would waive cost-sharing for treatment of COVID-19 through the end of May 2020, although many members extended the waivers.

The Outliers

Not everyone is going back to business as usual.

Regence BlueShield, based in Seattle, has taken another approach. Until Dec. 31, 2021, its fully insured and Medicare members can get COVID-19 treatment with no out-of-pocket costs, including hospitalization and rehabilitation, said spokesman Ashley Bach. Regence BlueShield has more than 1.2 million customers in Washington.

That contrasts with its neighboring insurer, Premera Blue Cross, based in Mountlake Terrace, Washington, which ended waivers on June 30.

In New England, while New Hampshire state officials allowed insurers to resume charging deductibles and copays several months ago, Vermont stands out for its decision to require insurers to continue to shield patients from out-of-pocket costs.

“We wanted to remove any barrier to people getting tested and getting treated,” said Michael Pieciak, commissioner of the Vermont Department of Financial Regulation. Vermont officials have worked with insurers to extend the program until at least March 2022.

Medicare Steps Up 

Throughout the pandemic, Medicare has expanded free services for its beneficiaries.

  • COVID-19 tests are free. If you can’t leave home, Medicare will pay to have a test brought to your residence.

  • COVID-19 vaccines are also free, including Pfizer or Moderna booster shots at least six months after the second Pfizer or Moderna shots, or a Johnson and Johnson booster shot at least two months after the first shot. 

  • If you can’t leave home, Medicare will pay for a health provider to vaccinate you at home.

  • COVID-19 antibody tests are free. If you’ve had the coronavirus, this test helps show if your body has developed an immune response, indicating that you’re less likely to be reinfected.

  • COVID-19 monoclonal antibody treatments are free if you have a mild to moderate case of the coronavirus and are at high risk of becoming sicker or being hospitalized.

  • Telehealth services have expanded to include more professionals, such as physical and occupational therapists, and can occur via telephone as well as via video.

If you want more details about Medicare COVID coverage, check out this 2020 KFF issue brief or this guide from the Center for Medicare Advocacy.

Deborah Schoch is a contributing writer who covers health and science. A longtime journalist, she has most recently done work for AARP, The New York Times and KNBC-TV Los Angeles.

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