COVID-19 medical bills could grow as more insurers restart cost sharing

Many job-based insurance plans temporarily covered hospital costs that COVID hospital patients would have owed. That’s been changing.

Credit: Will Jones

Credit: Will Jones

COVID-19 hospital patients who have health insurance through their jobs are increasingly responsible for bigger bills now that fewer insurers are waiving cost sharing.

When the pandemic began, the majority of private health insurers voluntarily waived the out-of-pocket costs associated with COVID-19 treatment. That meant that the patients weren’t held responsible for portions of the bill they would normally have to pay, such as co-payments or deductibles for hospital care.

But the availability of safe and effective COVID-19 vaccines shifted the landscape — the vaccines remain highly effective at keeping people out of the hospital.

“The biggest focus or benefit of the vaccine is, if you do get COVID, there’s a much greater likelihood that you won’t be hospitalized,” said Thomas Campanella, health care executive-in-residence at Baldwin Wallace.

As this shift started, more insurers started covering COVID-19 the same way they cover other hospital stays.

Kaiser Family Foundation reported in August that 72% of the two largest insurers in each state and Washington D.C. (102 health plans) no longer waive these costs, and another 10% of plans will phase out waivers by the end of October.

Waiving cost-sharing was both good citizenship and good public relations for the insurers, Campanella said. Last year, private insurers had fewer expenses because of declines in electives and people avoiding care.

“Having front page headlines saying how health insurers are making money off of COVID basically because people aren’t using it, it was not the greatest PR,” Campanella said.

But vaccines have changed people’s ability to lower their risk of COVID hospitalizations, he said, and people have started going back to the hospital for care they had delayed out of fear or cancellations.

Different plans, different impact

This shift in cost sharing applies differently to different people. About 5 million Ohioans have health insurance coverage either through Medicaid or Medicare, and this change doesn’t apply to those plans.

“For individuals who are on private insurance, it is dependent on that patient’s plan,” said Sarah Hackenbracht, president and CEO at Greater Dayton Area Hospital Association

The amount billed for a COVID-19 hospitalization ranges widely, depending on factors like how long the person stays, where they stay and what kind of treatment they receive.

Kelly O’Reilly, president and CEO of Ohio Association of Health Plans, which represents insurance companies, said co-pays and deductibles were reinstated for COVID treatment earlier this year by many plans as people became more familiar with best practices for limiting COVID exposure and as vaccines became available.

She said it is important to note that COVID-19 treatment is still covered per the terms of their insurance plan, even after cost-share waivers have ended.

An analysis by Kaiser Family Foundation found that among people covered by private insurance through a large employer, they paid an average of over $1,300 out-of-pocket when they were hospitalized with pneumonia.

The costs that are billed to insurance can also come back to cost everyone. If private insurers’ expenses rise, they cover those costs by raising everyone’s premiums, and Medicaid and Medicare cover costs through taxes.

Overall, unvaccinated COVID-19 hospitalizations cost the U.S. health system $2.3 billion in June and July 2021, according to Kaiser.

Who does this impact?

And even when cost sharing waivers were in place, the Associated Press has reported that there were still holes in the safety net. Big bills slipped through at times when people couldn’t get a test back when they were heavily rationed or when they accidently went out of network.

Tests are still free if a physician orders one to diagnose a suspected COVID-19 infection.

Hackenbracht said she would not want to see patients avoid the hospital because they are worried about costs and help for coverage can be available.

If insurance isn’t covering the full cost of care, hospitals have staff to help people look at financial assistance and some companies have employee relief funds.

Some Dayton residents have taken to the fundraising platform asking for donations toward medical bills.

And, Hackenbracht emphasized, COVID-19 vaccines help prevent hospital bills, and vaccines are free. People can even take home gift cards and cash at some vaccine sites offering incentives.

“There is no out of pocket cost for anybody to get vaccinated. It is completely free,” Hackenbracht said.

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