Will my health insurance cover the costs of coronavirus testing and treatment?

Under the the Families First Coronavirus Response Act, Medicare, Medicaid, and private health insurance plans are required to fully cover the cost of COVID-19 testing. | Image: JDHT Productions / stock.adobe.com

Key takeaways

Q: Will my health insurance cover the costs of coronavirus testing and treatment?

A: The novel coronavirus – and the COVID-19 disease it causes – have dominated headlines for several weeks, and have triggered a massive public health response in the United States. A common question that people have, even if they’re only mildly concerned about the  pandemic, is “How will my health insurance cover the coronavirus?”

The short answer? It depends. With the exception of Original Medicare, health insurance differs greatly in the U.S., depending on where you live and how you obtain your coverage. Including the District of Columbia, there are 51 different sets of state insurance rules, separate rules that apply to self-insured group plans (which are not regulated by the states), and 51 different Medicaid/CHIP programs.

Nearly half of all Americans – including a large majority of non-elderly Americans – get their health coverage from an employer. Those plans are regulated by a combination of state and federal rules, depending on the size of the group and whether it’s self-insured or fully-insured.

And about 6 percent of Americans buy their own health insurance in the individual market, where both state and federal rules apply.

Is testing for COVID-19 covered by health plans?

Under the terms of the Families First Coronavirus Response Act (H.R.6201), Medicare, Medicaid, and private health insurance plans – including grandfathered plans – are required to fully cover the cost of COVID-19 testing, without any cost-sharing or prior-authorization requirements, for the duration of the emergency period. That includes the cost of the lab services as well as the provider fee at a doctor’s office, urgent care clinic, or emergency room where the test is administered.

Since it’s a federal law, the requirements apply to both self-insured and fully-insured health plans, whereas the testing coverage requirements that numerous states have imposed (details here and here) are only applicable to fully insured plans.

What kinds of health plans might not cover testing?

Health plans that aren’t considered minimum essential coverage are not required to cover COVID-19 testing under the federal rules. This includes short-term health plans, fixed indemnity plans, and healthcare sharing ministry plans. It also includes the Farm Bureau plans in Tennessee, Iowa, and Kansas – which are not considered health insurance and are specifically exempt from insurance regulations. But some of these plans are voluntarily covering COVID-19 testing and telehealth, so the specifics depend on the plan.

States have the power to regulate short-term health plans, and Washington, for example, extended its testing coverage requirements to include short-term health plans. (Washington already has very strict rules for short-term health plans). But in most states, most plans that aren’t minimum essential coverage are not required to cover COVID-19 testing.

How can the uninsured get COVID-19 testing?

H.R.6201 allows states to use their Medicaid programs to cover COVID-19 testing for uninsured residents, and provides $1 billion in federal funding to reimburse providers for COVID-19 testing for uninsured patients. It’s worth noting that people who don’t have minimum essential coverage are considered uninsured, so depending on availability, they would be eligible for covered testing under these programs.

How much of COVID-19 treatment costs will health plans cover?

Although the federal and state governments have stepped in decisively to ensure that most people won’t incur out-of-pocket costs for COVID-19 testing, the cost of treatment is a different matter altogether.

There is no specific treatment for COVID-19, and although the majority of patients are able to recover without hospitalization, Harvard’s Global Health Institute estimates that about 20 percent of COVID-19 patients need to be hospitalized, and about 20 percent of hospitalized patients will need intensive care, including ventilators.

Inpatient care, including intensive care, is an essential health benefit for all ACA-compliant individual and small group health plans (but states define exactly what’s covered for each essential health benefit, so the specifics do vary from one state to another). And although large group plans are not required to cover essential health benefits, they are required to provide “substantial” coverage for inpatient care. If they don’t, the employer can be subject to a penalty under the ACA’s employer mandate, but about 5 percent of large employers still opt to offer scanty plans that don’t comply with this regulation and would offer little in the way of coverage for COVID-19 treatment.

But even when it’s covered by insurance, inpatient care is expensive. And so is outpatient care, depending on the scope of the care that’s needed. This is where patients’ cost-sharing comes into play. Under the ACA, all non-grandfathered, non-grandmothered health plans must have in-network out-of-pocket maximums that don’t exceed $8,150 for a single individual this year (this limit doesn’t apply to plans that aren’t regulated by the ACA, such as short-term health plans).

So for most patients, out-of-pocket costs won’t exceed $8,150. But that’s still a huge amount of money, and most people don’t have it sitting around. The majority of health plans have out-of-pocket limits well below that amount, but most people are still going to be on the hook for a four-figure bill if they end up needing to be hospitalized for COVID-19. Although employer-sponsored plans tend to be more generous than the plans people buy in the individual market, the average employer-sponsored plan still had an out-of-pocket maximum of $4,065 for a single employee in 2019.

Some states work to ensure COVID-19 treatment is affordable

New Mexico and Massachusetts are requiring state-regulated insurers to cover treatment (as well as testing) with no cost-sharing, and Minnesota is “strongly encouraging” insurers to do so (note that the regulation in Massachusetts only applies to doctor’s offices, urgent care centers, and emergency rooms, but not to inpatient care). In addition, several states are requiring telehealth treatment with no cost-sharing. But for the most part, people who need extensive treatment for COVID-19 are going to have to meet their health plan’s deductible and likely the out-of-pocket maximum.

Many states are encouraging or requiring state-regulated insurers to treat COVID-19 testing and treatment as in-network, regardless of whether the medical providers are in the plan’s network. But patients could still be subject to balance billing in those circumstances, since the out-of-network provider doesn’t have to accept the insurance company’s payment as payment-in-full, if it’s less than the billed amount.

And although H.R.6201 prohibits insurance plans from requiring prior authorization for testing, insurers are still allowed to impose their normal prior authorization rules for other services, including COVID-19 treatment, unless a state otherwise prohibits it on state-regulated plans.

How do I make sure I have coverage to protect myself from COVID-19?

So what can you do to protect yourself as much as possible in terms of your health insurance coverage during this pandemic? Here are a few pointers:

  • If you’re uninsured (which includes having a health plan that’s not minimum essential coverage), check to see if there’s a COVID-19 special enrollment period in your state. If there is, enrolling in an ACA-compliant plan is certainly in your best interest. And if your income is low (even temporarily, due to a layoff), check to see if you might be eligible for Medicaid.
  • If you have health insurance, make sure you understand what your plan covers and what your cost-sharing responsibilities are for various outpatient and inpatient care.
  • Check to see how your health plan handles prior authorizations.
  • Pay attention to the details of your health plan’s provider network. Your best chance of avoiding balance billing is to make sure you see in-network providers, and you don’t want to be having to sort that out while you or a family member is very unwell.
  • Check with your plan to see how telehealth is covered, and be sure you understand how to use the telehealth services. For non-severe cases, telehealth is recommended as a way to prevent further spread of the disease, and many health plans are reducing or eliminating cost-sharing for telehealth services in an effort to encourage its use.
  • If you had an HSA-qualified health plan last year and didn’t contribute the maximum allowable amount to your HSA, consider doing so now if you have the money available. You can make contributions for 2019 up until April 15 (note that this deadline has not been extended, even though the tax filing deadline has been pushed out to July). And if you currently have an HSA-qualified plan, you can contribute pre-tax money to the account for this year as well, at any point during the year. Whatever money you contribute to your HSA will be available to withdraw tax-free if you end up needing it to pay out-of-pocket costs for medical care.

Louise Norris is an individual health insurance broker who has been writing about health insurance and health reform since 2006. She has written dozens of opinions and educational pieces about the Affordable Care Act for healthinsurance.org. Her state health exchange updates are regularly cited by media who cover health reform and by other health insurance experts.

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