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In 2021, many insurance companies are expected to drop cost-sharing waivers that had helped patients pay for COVID-19 care, leaving their subscribers to pay a large portion of COVID-19 testing and treatment costs. Tempura/Getty Images
  • Insurance companies waived cost-sharing for COVID-19 testing and treatment in 2020 to help curtail the spread of the coronavirus.
  • In 2021, most insurance companies are expected to drop these waivers, leaving their subscribers to pay a large portion of COVID-19 testing and treatment costs.
  • Researchers suggest patients’ out-of-pocket burden could be substantial should insurers stop granting the waivers.

Being hospitalized for COVID-19 will most likely get more costly for the patient, not their insurance company.

That’s because most insurance plans are expected to drop their cost-sharing waivers, which have prevented many people from being inundated with medical debt after being hospitalized, sometimes for weeks, with COVID-19.

The Kaiser Family Foundation estimated in November that less than half of plan enrollees who are fully insured have coverage that waives cost-sharing for COVID-19 treatment through the end of the year.

Mary Ann Hart, RN, program director for the graduate program in health administration at Regis College in Weston, Massachusetts, said cost-sharing waivers have helped protect public health by encouraging people to find out if they contracted the virus and limiting the spread.

“All types of cost-sharing — copays, deductibles, and coinsurance — discourage people from getting healthcare by creating financial barriers to care that are borne by the insured consumer,” Hart told Healthline. “By waiving cost-sharing for COVID-19 testing and treatment, insurers are making it more likely that their subscribers get tested and treated for COVID-19 earlier on in their infection and illness.”

And testing and treatments were the main part of people’s experience with COVID-19 and the U.S. healthcare system.

The United States has a ready supply of three vaccines that have been given emergency authorization by the Food and Drug Administration (FDA) after trials have shown that all are highly effective at preventing COVID-19 diseases that are severe enough to require hospitalization.

The availability of those vaccines quickly changed the course of the pandemic.

Today, more restrictions are eased for vaccinated people. At the same time, many people hospitalized with COVID-19 are unvaccinated.

Bills for COVID-19 treatment are expected to become much larger as more insurance plans are expected to start their cost-sharing again this year.

Recent research published in the journal medRxiv that examined 4,075 COVID-19 hospitalizations from March through September 2020 found 71 percent of privately insured patients and nearly half Medicare Advantage patients spent an average of $788 and $277, respectively, in out-of-pocket costs for facility and/or professional/ancillary services.

Some saw even higher bills. The research team from the University of Michigan reported that total out-of-pocket spending exceeded $4,000 for 2.5 percent of privately insured hospitalizations, compared with 0.2 percent of Medicare Advantage hospitalizations.

The researchers say their findings suggest insurer cost-sharing waivers may not cover all hospitalization-related care, and patients’ out-of-pocket burden could be substantial should insurers stop granting the waivers.

“Rather than rely on voluntary insurer actions to mitigate this burden, federal policymakers should consider mandating insurers to waive cost-sharing for all COVID-19 hospitalization-related care throughout the pandemic,” the Michigan team concluded.

James Papesca, adjunct nursing faculty at the Young School of Nursing at Regis College, says cost-sharing is a major element of a health insurance plan, whether they be deductibles, copayments, or coinsurance variances.

But when former President Donald Trump signed the Coronavirus Aid, Relief, and Economic Security (CARES) Act into law in March 2020, it required insurers to cover COVID-19 testing and vaccinations at no cost to members and all COVID-19 treatment costs for Medicare patients.

“COVID-19 was threatening to overwhelm the American healthcare system with infected patients,” Papesca told Healthline. “By waiving cost-sharing for diagnostics testing and healthcare services, health insurance providers and the government facilitated care for many Americans and removed cost barriers to care.”

Health insurance companies could bear the costs themselves because when the pandemic hit, elective procedures and surgeries and other less-urgent care were delayed, eliminating typical claims and making the companies more profitable, Papesca said.

“In essence, the cost-sharing waiver was designed to ensure each American had health equity in regard to COVID-19, reduce the personal financial burden in the event of illness, and reduce the economic impact on the healthcare system,” he said. “Waiving healthcare fees was an excellent move from a public relations standpoint. The health insurance industry received credit for helping customers during tough times and the consumer felt the financial benefit.”

But Papesca says he doesn’t believe there’s an advantage for insurance companies to voluntarily extend the cost-sharing waivers as more people are vaccinated against COVID-19 and return to pre-pandemic situations, including usual activity and healthcare practices.

As the Kaiser researchers noted, more than 88 percent of people covered by insurance plans had cost-sharing policies waived at some point during the pandemic. But many of those waivers related to COVID-19 are expected to expire soon. Wellmark Blue Cross and Blue Shield, for example, is ending their waivers on June 30.

America’s Health Insurance Plans has put together a list of what companies are offering COVID-19 waivers. You can check what your insurance carrier is doing here.

All told, some Harvard University economists estimated in November that the COVID-19 pandemic would cost the United States $16 trillion (yes, that’s a T).

“This conservative number includes vaccinations, COVID-related deaths, and deaths related to reluctance to seek medical care, impact of long-term disability, and mental health impact,” Papesca said.

Papesca looked at his own health insurance policy and did the math: Without cost waivers, if he were hospitalized for more than 15 days, he would be on the hook for his $5,000 deductible and his 20 percent coinsurance.

“The removal of cost-sharing waivers places this financial burden on the patient and their family,” he said. “Like every American, I cannot afford to get sick with COVID.”

Heather Kawamoto, vice president of product strategy at Waystar — a technology company that deals with healthcare payments — says continuing the waivers decreases the financial barriers to healthcare, increasing the opportunity of treatment and containment and building goodwill with patients.

Kawamoto says that if the waivers aren’t continued, patients with insurance coverage could see bills as high as $12,000, based on annual maximum out-of-pocket expense in their policies. That’s especially problematic, she said, as surveys indicate most Americans can’t cover a $1,000 unplanned expense.

“For patients unable to pay for the medical debt also means a major hit to credit scores and possible bankruptcy,” she said.