Patients hospitalized for COVID-19 this year could pay thousands in bills

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Americans who get seriously ill from COVID-19 in 2021 might have to pay thousands of dollars in bills from their hospitals, doctors and ambulance companies, a new study suggests.

The new University of Michigan analysis, published in JAMA Network Open, has implications for both policymakers and people who haven't yet gotten vaccinated, as well as for people with underlying conditions that put them at risk of a severe breakthrough case of COVID-19.

Most health insurance companies voluntarily waived co-pays, deductibles and other cost-sharing for hospitalized COVID-19 patients in 2020, but many major insurers lifted those waivers in early 2021. Tens of thousands of Americans have gotten severely ill and received hospital or emergency care in the surge of cases that has happened since early 2021.

Based on data from actual patients hospitalized for COVID-19 last year, the study suggests the lack of waivers could mean bills of about $3,800 for people with job-related or self-purchased private insurance, and $1,500 for people with Medicare Advantage plans.

"Many insurers claim that it is justified to charge patients for COVID-19 hospitalizations now that COVID-19 vaccines are widely available," said lead author Dr. Kao-Ping Chua, a health policy researcher and pediatrician at Michigan Medicine and the Susan B. Meister Child Health Evaluation Research Center.

"However, some people hospitalized for COVID-19 aren't eligible for vaccines, such as young children, while others are vaccinated patients who experienced a severe breakthrough infection. Our study suggests these patients could face substantial bills."

The new study analyzes more than 4,000 COVID-19-related hospitalizations of people with private insurance and Medicare Advantage insurance between March and September 2020. The data come from the IQVIA PharMetrics Plus for Academics Database, which includes claims data from multiple insurers across the U.S.

WHAT'S THE IMPACT?

The researchers found that the vast majority of patients didn't have to pay for hospital services such as room-and-board charges, suggesting their plans waived cost-sharing for bills sent by hospitals. However, among the few patients who did have to pay for hospital services – a sign that a waiver wasn't in place – out-of-pocket costs were in the thousands of dollars.

That amount billed directly to patients is a small portion of the average cost of care for a hospitalized COVID-19 patient. The study finds that each hospitalization of a person with private insurance cost a total of $42,200 on average, and that each hospitalization of a person with COVID-19 who had Medicare Advantage coverage averaged about $21,400.

Chua and his colleagues originally published the findings as a preprint in June 2021. Since that time, the Kaiser Family Foundation analyzed the status of waivers from the two largest insurers in each state and found that 72% had ended their waivers for COVID-19 hospitalizations by this past August.

Even with the waivers, patients sometimes got stuck with bills. Chua said that even when examining hospitalizations where there appeared to be a waiver in place, patients sometimes received bills from clinicians for seeing patients in the hospital, or were occasionally hit with ambulance bills.

"So the so-called waivers that were in place in 2020 may have covered the big-ticket item, but [they] didn't necessarily cover all hospital-associated care," said Chua.

For that reason, he's wary of reintroducing cost-sharing waivers – a potential solution that he sees as misguided.

"I'm not a big fan of charging patients thousands of dollars for emergency hospitalizations, whether it's COVID or not," said Chua. "The point of cost sharing is to deter overuse. Generally, for emergency hospitalization, you're not overusing care. In particular for COVID, I worry that people with severe COVID symptoms are going to delay going to the hospital owing to concerns about costs. That could increase the risk of complications, and possibly even death."

Overall, 71% of privately insured patients received a bill for any hospitalization-related service, with an average size of $788. Among those with Medicare Advantage coverage, 49% received a bill, with an average size of $277.

Chua said some insurers may only have waived cost-sharing for the hospital portion of the bill, but believes it's possible that some patients were mistakenly billed for services from doctors and ambulances because insurers implemented their waivers incorrectly, or healthcare providers did not code all aspects of the care as being related to COVID-19.

POLICY IMPLICATIONS

To prevent the possibility of patients avoiding COVID-19-related care due to costs, Chua said federal policymakers could require insurers to waive costs of COVID-19 hospitalization-related care throughout the pandemic – just as they already do for COVID-19 testing and vaccination. But he added that policymakers are unlikely to do this given widespread anger against the unvaccinated.

"Back in 2020, the HEROES Act included a provision that would have required insurers to fully cover the costs of hospitalizations," said Chua. "That was never passed. The federal mettle to do anything about this problem was muted by the fact that providers voluntarily chose to cover the costs. Now that that's no longer the case, there would be a better argument for federal action.

"I'm pessimistic though, because there's a lot of anger against the unvaccinated," he said. "Some insurers may view waivers as a way of subsidizing the unvaccinated. I don't agree with that viewpoint, but I disagree with reinstituting cost-sharing, because you could still get stuck with the bill."

And it's not just the hospital and ambulance bills that are concerning. Some patients may have to go to skilled nursing facilities for further recovery, especially if they spend any significant amount of time in an ICU. Still others have developed comorbidities and may have to go on oxygen – another COVID-19-related cost. Indeed, it's not just the hospitalization that can be financially ruinous, but the aftermath as well.

"The question for an insurer is, if they had to fully cover 4,000 hospitalizations, would that be a substantial expense? Yes, in the sense that a lot of these hospitalizations are occurring, but I don't think insurers are really suffering right now, because utilization has not rebounded to pre-pandemic levels, which means any additional costs they might have by waiving cost-sharing is offset by the fact that other utilization has decreased," Chua said.

"That's just my impression. It doesn't seem like it would be that onerous to insurers. They're trying to mitigate their own costs the best way they can."

Hospitals that received special pandemic funding are already barred from billing patients directly for costs beyond what their insurance covers. Hospitals also get reimbursed by the federal government when they care for uninsured COVID-19 patients.

Chua and colleagues also recently published a paper looking at out-of-pocket costs for people over 65 in Medicare Advantage plans who were hospitalized for influenza, as a way to estimate potential out-of-pocket spending for COVID-19 hospitalizations. That paper found the average bill for influenza hospitalization was around $1,000.

Twitter: @JELagasse
Email the writer: jeff.lagasse@himssmedia.com