Cost-sharing waivers for COVID-19 patients had substantial financial impact

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Federal policymakers should mandate insurers to waive cost-sharing for all COVID-19 hospitalizations to avoid large bills for patients, according to a study released May 30 by authors associated with the University of Michigan Medical School and Boston University.

Few COVID-19 hospitalizations in the study had out-of-pocket spending for facility services, suggesting that most inpatient care was covered by insurers through cost-sharing waivers, the report said. However, many hospitalizations had out-of-pocket spending for professional and/or ancillary services, such as bills from physicians or ambulance services.

Seven in 10 privately insured patients and half of Medicare Advantage patients had out-of-pocket spending for hospitalizations, suggesting that insurer cost-sharing waivers do not cover all inpatient care.

If waivers expire, the out-of-pocket burden could be substantial, the authors said, particularly for privately insured patients.

WHY THIS MATTERS

Many insurers waived inpatient costs for COVID-19 patients during 2020.

Patients may have been billed if their plans did not implement waivers or if the waivers did not capture all hospital-related care, such as clinician services, the authors said.

Of 1,377 hospitalized COVID-19 patients with private insurance, 71.2% had cost-sharing for facility services billed by hospitals and services billed by clinicians or ancillary providers, or both.

Of 2,698 COVID-19 hospitalizations for patients with Medicare Advantage coverage, 49.1% had cost-sharing for the same services.

The study found that the mean out-of-pocket spending for patients with private insurance was $788. Out-of-pocket costs for facility services was $3,840.

The cost for those with Medicare Advantage coverage was $277 and $1,536, respectively.

Total out-of-pocket spending exceeded $4,000 for 2.5% of privately insured hospitalizations, compared with 0.2% of Medicare Advantage hospitalizations.

THE LARGER TREND

The study looked at hospitalizations between March and September 2020, during the height of the pandemic, when many insurers waived cost-sharing expenses.

Most health insurers voluntarily waived co-pays, deductibles and other cost-sharing for hospitalized COVID-19 patients in 2020, but many of those waivers are being phased out.

"Assessing out-of-pocket spending for COVID-19 hospitalizations in 2020 could demonstrate the financial burden patients may face if insurers allow waivers to expire, as many chose to do during early 2021," said authors Kao-Ping Chua, Rena M. Conti and Nora V. Becker. The authors said their report has yet to be certified by peer review.

ON THE RECORD

Asked what insurers are expected to pay for COVID-19 inpatient treatment, what role vaccinations play and what incentives payers may be offering to their members to get vaccinated, America's Health Insurance Plans said, "The COVID-19 crisis has tested all of us – and it has brought us all together. Health insurance providers have taken swift action throughout this crisis to support the changing needs of Americans. For example, at this very moment, health insurance providers are working quickly to make it easier for at-risk Americans to get vaccines and help us get back to the moments we all miss. 

"Through historic partnerships with federal, state, and community leaders, health insurance providers are working to ensure speedy and equitable access to safe vaccinations through education and outreach, collaborations with providers, and individual support to overcome social barriers like access to transportation.

"We also know that medical experts project that COVID-19 will be part of American life for years to come, and health insurance providers are committed to fighting COVID-19 now and in the future. We remain committed to affordable testing, treatment, vaccines and sustainable improvements that expand access and affordability for everyone."
 

Twitter: @SusanJMorse
Email the writer: susan.morse@himssmedia.com