On March 14, 2020, the U.S. House of Representatives passed the Families First Coronavirus Response Act, a relief package with bipartisan support, by a vote of 363 to 40. The multi-billion dollar legislation, which was negotiated by Speaker Nancy Pelosi and the Trump administration, is expected to be taken up by the U.S. Senate soon. This legislation builds on a separate coronavirus spending package from early March that authorized $8.3 billion in emergency funds to address the crisis.
The wide-ranging House bill passed on March 14 includes important new policies and funding for programs designed to help millions of Americans affected by the coronavirus outbreak. The legislation requires emergency paid sick days and paid leave for some workers, temporarily increases the federal match percentage for state and territorial Medicaid programs, funds expanded unemployment insurance, and provides additional funds to food security programs (such as SNAP). This post focuses on the bill’s insurance-related provisions. In general, the bill would require coronavirus testing and associated costs to be covered by all forms of insurance coverage without any cost-sharing (such as a copay or coinsurance)—at least until the end of the declared public health emergency. The bill also includes limited testing-related coverage options for uninsured individuals.
Brief Background
Whether and how coronavirus-related testing and treatment will be covered by public and private insurers has been a point of discussion since the coronavirus outbreak began. Without additional cost-sharing protections or assured coverage, individuals who otherwise need to be tested or treated may decline to seek care simply because they are worried about costs. This could further spread the virus and lead to a higher mortality rate. Affordability concerns are heightened for those who are uninsured or underinsured—and may be further exacerbated by an economic downturn that results in reduced hours and incomes for workers.
Ensuring widespread access to coronavirus-related testing and treatment is also challenging due to America’s fragmented coverage system. Most people are enrolled in health insurance through their employer (or a family member’s employer). Others receive coverage through Medicare, Medicaid, or CHIP. Millions more are covered in the individual market and through military programs. And about 20 million people remain uninsured.
Of the 105 million adults who face an elevated risk of being infected with coronavirus, 72 percent are age 60 or older and 28 percent are ages 18 to 59. Younger individuals who face a higher risk typically do so because of an underlying chronic condition (such as diabetes, cancer, or heart disease). While most adults age 65 and older are covered by Medicare, the Kaiser Family Foundation estimates that nearly 6 million of those at a higher risk for coronavirus are uninsured (including 3.9 million adults under age 60).
In response to the outbreak, many private insurers announced voluntary coverage policies. In addition, state officials have clarified coverage requirements for state-regulated private health insurance plans. While these efforts are critical, federal legislation is needed to require uniform coverage by group health plans, which are largely regulated under federal law.
To date, most of these announcements from insurers and states have focused on coverage policies related to testing for coronavirus, rather than what could be costly treatment for those who test positive. There is currently no specific treatment for coronavirus, but major medical insurance should cover the services needed (such as hospitalization and lab services). Federal regulators recently issued guidance acknowledging, for instance, that many services needed for treatment of coronavirus are already considered to be essential health benefits under the Affordable Care Act (ACA), meaning they must be covered by ACA-compliant individual and small group plans.
While coronavirus treatment should generally be covered by insurers, costs may vary significantly by plan. Since different plans have different cost-sharing configurations and actuarial values, consumers who need treatment for coronavirus could be left with major medical bills, at least up to their plan’s annual out-of-pocket maximum. One study estimates that potential coronavirus treatment costs—for large employer health plans and enrollees—could range from about $10,000 (for patients with no complications or comorbidities) to $20,000 (for patients with major complications or comorbidities); these estimates are based on typical spending for hospital admissions for pneumonia. (Coronavirus treatment may not be covered by plans that do not offer comprehensive coverage, such as short-term plans or health care sharing ministries.)
Testing for coronavirus and a coronavirus vaccine (which does not yet exist) may eventually be covered without cost-sharing under a separate provision of the ACA. Section 2713 of the Public Health Service Act requires all non-grandfathered private health plans—including individual, small group, large group, and group health plans—to cover certain preventive services without cost-sharing. These preventive services include evidence-based services that have a rating of “A” or “B” under current U.S. Preventive Services Task Force recommendations as well as vaccines recommended by the Advisory Committee on Immunization Practices.
These expert bodies, however, often need time to evaluate the evidence for and against a proposed preventive service or vaccine before making a recommendation. In addition, under current federal regulations, insurers have up to one year to implement new coverage recommendations. Thus, coverage for coronavirus-related vaccines or testing under these provisions will be delayed. In light of this delay, the bipartisan House legislation aims to help fill this gap.
Private Health Plans
Under the House legislation, all comprehensive private health insurance plans would be required to cover FDA-approved testing needed to detect or diagnose coronavirus and the administration of that testing. Plans would also be required to cover any services or items provided during a medical visit that result in coronavirus testing or screening.These services or items could be provided during an in-person or telehealth visit to a doctor’s office, an urgent care center, or an emergency room. All services would be covered without cost-sharing (meaning patients would pay no out-of-pocket costs) or barriers (such as prior authorization or other medical management requirements).
This coverage would only begin after the bill is enacted, so those who have already received coronavirus tests are not necessarily covered (unless their state, insurer, or employer has adopted a similar policy). In addition, the requirement is temporary: the coverage requirements extend only while there is a declared public health emergency (as defined under federal law).
The bill would apply to group health plans (plans offered by employers) and insurers that offer individual and group health insurance coverage. The bill explicitly includes grandfathered health plans, which are a type of plan that was in existence when the ACA was enacted. Grandfathered plans are exempt from most of the ACA’s requirements (including the ACA’s requirement to cover preventive services without cost-sharing) and can maintain their grandfathered status so long as they do not make certain changes. About 13 percent of covered workers were enrolled in a grandfathered employer-based plan in 2019.
These provisions of the bill would be enforced by the Departments of Health and Human Services (HHS), Labor and Treasury. The agencies could implement this requirement through sub-regulatory guidance or program instruction, meaning the changes could be adopted quickly (rather than waiting on a more formal regulatory process).
Medicare
The bill would extend a similar coverage requirement to the traditional Medicare program and the Medicare Advantage program. HHS would have flexibility to implement these requirements for both programs.
For traditional Medicare, the Supplementary Medical Insurance Trust Fund—which funds Medicare Part B (for physician services and medical supplies) and Part D (for prescription drug coverage)—would be required to fully cover the costs, with no deductible for patients, of coronavirus testing-related services. For purposes of Medicare, “testing-related services” are defined to include a medical visit that results in an order for, or administration of, a coronavirus diagnostic or screening test.The medical visit could occur in an office or other outpatient setting, an emergency room, a nursing facility, or a home services visit, as well as during hospital observation or in a domiciliary, rest home, or custodial care setting. Coverage also applies to online digital evaluation and management services.
Medicare Advantage plans would have to cover similar benefits with no cost-sharing for enrollees and without prior authorization or other utilization management restrictions. The bill would require clinical diagnostic laboratory tests and testing-related services to be covered as defined under the traditional Medicare program.
The bill incorporates existing Medicare payment methodology for outpatient care and instructs HHS to develop a claims modifier for coronavirus-related claims. As with private health insurance coverage, coverage would begin once the legislation is enacted and end after the public health emergency is declared over.
Medicaid and CHIP
The bill would require similar coverage under state Medicaid and CHIP programs without cost-sharing. State and territorial Medicaid programs and CHIP programs would have to cover FDA-approved testing needed to detect or diagnose coronavirus, the administration of that testing, and any associated medical visit. The CHIP-specific coverage provisions would apply to coverage for low-income children and low-income pregnant women. Coverage extends for the same period: from when the legislation is enacted until the end of the declared public health emergency.
Uninsured Individuals
States would have the option to use their Medicaid program to provide uninsured individuals with FDA-approved testing needed to detect or diagnose coronavirus, the administration of that testing, and an associated medical visit. The bill authorizes full federal funding—a 100 percent federal medical assistance percentage—for states that do so (although the costs of treatment if someone does have coronavirus are not included).
The bill would separately authorize $1 billion for the National Disaster Medical System to pay for lab tests and other claims to detect or diagnose coronavirus in uninsured individuals. Under this System, the Secretary of HHS has the authority to determine and pay claims—either directly to a provider or through contracts. (A previous version of the House bill had set the payment rate for labs and physicians based on Medicare’s clinical lab fee schedule but did not prohibit surprise or balance billing by providers. This could have led to significant bills for uninsured patients. It will be interesting to see how HHS implements this funding stream to support testing for the uninsured.)
For both provisions, the bill defines an uninsured person as someone not enrolled in a federal health care program or private health insurance coverage (meaning a group health plan or group or individual health insurance coverage as defined under Section 2791 of the Public Health Service Act). Under this definition, “individual health insurance coverage” does not include short-term, limited duration insurance. Thus, individuals enrolled in only a short-term plan could presumably be considered uninsured for purposes of securing limited coverage for testing-related services.
Military Coverage
Similar to the programs discussed above, TRICARE, Veterans Affairs, and coverage for federal civilians could not impose cost-sharing on the coverage of FDA-approved testing needed to detect or diagnose coronavirus, the administration of that testing, and any medical visit associated with the testing. Coverage would begin upon enactment and end after the public health emergency is declared over. The bill authorizes a total of $142 million to cover these costs across the various programs through September 30, 2022.
Indian Health Services
HHS must cover the cost of the same services noted above for those receiving services through the Indian Health Services, including through an Urban Indian Organization. Similar to the programs discussed above, this coverage would be provided without cost-sharing and would end after the public health emergency has ended. The bill authorizes $64 million to cover these costs through September 30, 2022.
