Last year, during the height of the pandemic, many insurers voluntarily waived patient cost sharing for COVID-19 treatment.
Cost sharing is what a patient owes out of their own pocket, either through a deductible, copay or coinsurance.
Insurers waived those costs while experiencing record profits due to many people across the country putting off care either due to lockdowns or out of fear for contracting the virus.
The deflated volumes had a greater affect on providers, who saw revenues plummet, but for payers it meant still collecting premiums without having to pay for as much care compared with a normal year.
The high profits, along with Affordable Care Act limits on insurer profits, all played a role in spurring payers to do away with out-of-pocket cost for COVID-19 patients. Some states did make it a requirement for fully insured plans.
Insurers have largely done away with those waivers and more are expected to disappear by the end of October as COVID-19 patients inundate hospitals once again, leaving them more exposed to the costs of the disease.
This could pose a new strain for providers, as some Americans are left to cover their out-of-pocket costs and not the insurer.
The average annual deductible was $1,644 in 2020, though much larger figures for families, according to KFF. But many Americans, four in 10, don’t have $400 in the bank to cover an unexpected expense, let alone $1,644, per the Federal Reserve’s report on Americans’ economic well-being.
With patients unable to pay, it potentially leaves hospitals in the lurch with either no or partial reimbursement.
The federal government did mandate insurers to cover testing and vaccines. But the requirement does not extend to paying for the patient’s share of treatment costs.
However, insurers are held to certain profit limits thanks to the ACA. Payers must spend a certain percentage of premiums on healthcare instead of profits, marketing or administration expenses. If an insurer fails to meet those minimums, then it must rebate its clients, which was what motivated some insurers, at least in part, to institute the waivers on cost sharing.
- Health experts warn patients may soon see big bills related to treatment for COVID-19, according to a new report from researchers at the Kaiser Family Foundation.
- Of the two largest insurers in each state, including D.C., 72% are no longer waiving cost sharing for patients who are treated for the disease. The report comes as hospitals are reporting surges of COVID-19 patients due to the highly transmissible delta variant.
- More insurers are expected to end the moratorium on patient cost sharing by the end of October, putting the financial responsibility back on patients, KFF said.
Source: Deep Dive