As local, state, and federal policymakers work to address alarming existing and potential shortages in supplies and capacity (testing, ventilators, beds, and staff, to name a few) to prepare for the expected increase of COVID-19 patients in the coming weeks and months, it is critical that early efforts also build on the new legislation that covers testing costs to provide free treatment for those exposed to coronavirus.
Providing free treatment is important for many of the same reasons that free testing is so urgent. First, by ensuring people do not avoid testing (as testing capacity slowly ramps up) because they fear the unmanageable costs of care, it will help urgently address the public health crisis and slow the spread (flattening the curve). Second, doing so will ensure better health outcomes for people who are sick by enabling them to seek care. And third, it will reduce the financial burdens of care during what is rapidly turning into an economic emergency for millions of Americans.
Eliminating Catastrophic Costs
The Kaiser Family Foundation estimates that the average hospital costs for inpatient admissions stemming from COVID-19 could range from approximately $10,000–$20,000, depending on the nature of complications.
For people who have insurance—at least, those with plans that meet ACA standards—the services needed to immediately treat COVID-19 should be considered a covered service. However, the out-of-pocket costs still required for insured individuals will vary depending on how high a plan’s deductible, co-pay, or co-insurance is, whether a patient has access to in-network facilities, and whether they are subjected to “surprise” or “balance” billing, meaning they go in-network but unwittingly access out-of-network services while doing so (or they are forced to seek out-of-network care because their in-network facility does not have capacity). And those who are uninsured would likely face financial devastation from such bills.
Everything we know about out-of-pocket costs and how they impact behavior tells us that if people think they will face thousands of dollars in medical bills, they may avoid getting tested, which will exacerbate the public health crisis. Research shows that 41 percent of underinsured individuals delayed care due to cost fears; those numbers are, unsurprisingly, far higher for people who are uninsured—and we know that people are losing their health insurance as the number of lay-offs spikes by the day.
Urgent Congressional Action Is Needed
The House bill currently awaiting Senate approval takes the critical step of providing free testing for insured people and some funding for testing for uninsured people. Doing so encourages diagnosis, which will help stop the spread. But in its next iteration of help, Congress must go further and ensure that no insured or uninsured person will face out-of-pocket costs. It can do so by expanding the funding and range of services reimbursed through the National Disaster Medical System (NDMS), which will, if the House bill passes, already be used to reimburse providers for testing provided for uninsured individuals (though Congress or the secretary of the Department of Health and Human Services (HHS) should clarify that providers cannot then also bill patients for amounts above what is reimbursed by the program).
First, Congress should use the NDMS to instruct providers to bill HHS for costs incurred during treatment of the virus (including transportation to providers and mental health treatment) for those who are uninsured. Second, Congress needs to ban all balance billing, a protection that has been under consideration by congressional committees for months. At a minimum, Congress should ban balance billing for any costs related to diagnosis and treatment of COVID-19 and emergency services provided for patients seeking testing or diagnosis—even if a patient is not ultimately diagnosed with COVID-19.
Third, Congress should fund and use the NDMS to reimburse providers for out-of-pocket costs that would otherwise be billed to consumers in the form of deductibles, copays, and coinsurance. Deductibles and coinsurance are likely to be the biggest expenditures for patients that need extensive treatment. Fortunately, comprehensive plans—including job-based plans—include an annual out-of-pocket maximum that caps a consumer’s overall out-of-pocket expenditures. This means that the NDMS can be used to cover cost-sharing for COVID-related diagnosis and treatment that consumers would otherwise owe up until they reach their plan’s out-of-pocket maximum. From there, the insurer would cover the costs associated with in-network covered services. To keep costs down, Congress could consider tying reimbursement rates for COVID-related treatment to Medicare rates (perhaps with a plus-up on top of base rates), although any bill that does so would need to clearly and strongly prohibit providers from billing patients for additional costs. The NDMS already ties reimbursement rates for services funded through the program to Medicare rates; Congress would now need to allow the program to pay for cost-sharing obligations, and clarify that any cost-sharing would be calculated based on those Medicare rates. This is particularly important for deductibles and coinsurance. Policymakers should also consider whether such a policy tying rates to Medicare could incent providers to avoid coding care as COVID-19-related costs, and how to structure the program to limit that possibility.
Finally, and importantly, Congress should eliminate treatment-related out-of-pocket costs for people enrolled in public insurance plans. Doing so is straightforward for traditional Medicare and Medicaid, but may create complications for Medicare Advantage and Medicaid managed care organizations. Congress could consider similarly utilizing the NDMS to reimburse cost-sharing for public insurance programs should operationalizing that change mid-year cause challenges.
This crisis highlights huge holes in our patchwork coverage system. We still have millions of uninsured people in the country, and out-of-pocket expenses are too high for 29 percent of people with insurance—and the uninsured often cannot afford treatment at all. These deep challenges are a part of the broader conversation around public insurance expansion efforts. Ideas to address them more systematically have been discussed on the presidential campaign trail and as a part of at least nine different legislative proposals active in Congress. In the meantime, Congress must act right now to patch the most imminently dangerous of those holes.