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January 11, 2022

Insurance now must cover at-home Covid-19 tests. Here are the details.

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    Private health insurers must cover the costs of up to eight at-home Covid-19 tests per person per month, effective Jan. 15, according to new guidance released Monday by HHS, the Department of Labor, and the Treasury Department—but it's unclear whether retailers will be able to keep the coveted tests in stock.

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    The guidance

    When the Biden administration first announced plans to cover at-home Covid-19 tests, some experts worried that consumers would first have to pay for the tests out of pocket and then seek reimbursement from their insurer—a potentially clunky, time-consuming process.

    But the new guidance creates an alternative path. It allows insurers to set up programs at "preferred" pharmacies or retailers where the insurer will directly cover the cost of at-home Covid-19 tests, with no out-of-pocket costs.

    "Plans and issuers are strongly encouraged to provide direct coverage for [over-the-counter] Covid-19 tests to participants, beneficiaries and enrollees by reimbursing sellers directly without requiring participants, beneficiaries or enrollees to provide upfront payment and seek reimbursement," the guidance states.

    Under the guidance, individuals could also purchase tests on their own and seek reimbursement.

    Up to eight at-home tests would be covered each month. A family of four, for example, would be covered for up to 32 at-home tests each month.

    The guidance allows insurers to cap reimbursement per test at $12. However, plans also can "provide more generous reimbursement up to the actual price of" more expensive tests.

    Currently, the majority of at-home Covid-19 tests cost about $12 a test, the Wall Street Journal reports. But some tests cost more, including the at-home molecular test made by Detect, which costs $75, Politico reports.

    "By requiring private health plans to cover people's at-home tests, we are further expanding Americans' ability to get tests for free when they need them," HHS Secretary Xavier Becerra said.


    Some experts praised the new guidance, saying it will help more people get more at-home Covid tests.

    "This policy will help millions of families afford Covid tests that allow them to be in school, visit family members, and live their lives," Sabrina Corlette, co-director of Georgetown University's Center on Health Insurance Reforms, said. "It's not perfect, and there will be glitches, but the cost of these tests has been a huge barrier for many people, and this policy helps lower that."

    Corlette added that she would "love to see a more comprehensive national testing policy where these tests are free for everybody regardless of insurance status."

    "Will it help everybody? No. It is definitely not the ideal way to lower barriers to Covid testing," she added. "But it is helpful."

    Matt Eyles, CEO of America's Health Insurance Plans, in a statement acknowledged there "will likely be some hiccups" as the new guidance is implemented, but insurers will work with the Biden administration as problems arise.

    "We recognize that the administration's guidance takes steps to mitigate the real risks of price gouging, fraud, and abuse," Eyles said. "Health insurance providers will work as quickly as possible to implement this guidance in ways that limit consumer confusion and challenges."

    Other experts warned that the guidance does not ensure that consumers will be able to find rapid tests in stock. For instance, Kim Keck, CEO of the Blue Cross Blue Shield Association, said she is "concerned that the policy does not solve for the limited supply of tests in the country and could cause additional consumer friction as insurers stand up a program in just four days' time."

    Lindsey Dawson, a policy analyst at the Kaiser Family Foundation, said the new guidance could face a bumpy rollout if at-home tests are still not widely available in stock.

    "If reimbursement exists but there aren't tests to purchase, that doesn't help an individual consumer," she said.

    Dawson added the guidance could also increase demand for an already short supply of at-home tests. "The policy could certainly drive demand, and could exacerbate the problem," she said.

    Michael Bagel, director of public policy at the Alliance of Community Health Plans, said insurers may not have enough negotiating power to bring down the prices of at-home tests in the future because of the increased demand.

    Bagel argued that the Biden administration should focus on supply chain issues preventing people from getting at-home tests rather than regulating how tests will be reimbursed. Bagel also criticized the government's decision to require insurers to cover the costs of the tests, rather than the government paying the costs directly, Bagel said.

    "Covering at-home tests in addition to everything else we're covering for Covid—treatments that have continued to go up, hospitalizations that are increasing—are just another unfunded mandate," he said. (Lim, Politico, 1/10; Armour/Abbott, Wall Street Journal, 1/10; Weiland/Kliff, New York Times, 1/10; Franklin, NPR, 1/10; Goldman, Modern Healthcare, 1/10; Chen, Axios, 1/10)

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