In a shift from earlier in the pandemic, before vaccines were widely available, a majority of private insurance plans no longer waive out-of-pocket costs for coronavirus-related hospitalizations, according to a new analysis from the Kaiser Family Foundation (KFF)—and more insurers plan to follow suit.
Covid-19 hospitalization costs rising for patients
For its latest analysis, KFF looked at data from HHS and America's Health Insurance Plans for the two largest insurers in each state and Washington, D.C., which together accounted for 102 health plans.
KFF found that 73 of those health plans—or 72%—are no longer waiving out-of-pocket costs for hospitalized Covid-19 patients. Almost half of those who are no longer waiving out-of-pocket costs ceased doing so by April 2021, when the vaccines became widely available, KFF writes.
Meanwhile, of the 29 plans still waiving out-of-pocket costs for hospitalized Covid-19 patients, 10 will have their cost-sharing waivers expire in October. This includes plans whose waivers are tied to the federal public health emergency that expires on Oct. 17. However, KFF notes the public health emergency could be extended.
The cost-sharing waivers at an additional 12 health plans will expire at the end of the year, KFF found, while 2 plans will have their waivers expire in 2022. Five of the plans analyzed by KFF did not specify when their waivers will end.
In addition, based on preliminary results from the 2021 KFF Employer Health Benefits Survey, many employers offering self-funded or fully insured health plans to their workers reported waiving Covid-19 treatment cost sharing. However, because over 70% of the interviews in the survey were conducted before April 19—when vaccines became available for most adults—many of the reported waivers may have already expired, according to KFF.
According to KFF, the findings mark a substantial shift from earlier in the pandemic, when another analysis from the company found that 88% of people enrolled in fully insured private health plans would have had their out-of-pockets costs from a Covid-19 hospitalization waived. In fact, according to KFF, all of the 102 plans included in the latest analysis had waived costs for Covid-19 patients at some point in 2020.
Why the change?
The decision to waive out-of-pocket costs for hospitalized Covid-19 patients early in the pandemic was largely driven by "high profits, ACA medical loss ratio rebate requirements, public health concerns about managing the pandemic, and concern over a federal mandate to cover Covid-19 treatment costs," according to KFF.
But now, health plans are ending their cost-sharing waivers as Covid-19 vaccines "have become widely available to adults in the U.S. and health care utilization has rebounded more generally," KFF said in its analysis. This means health plans "may no longer face political or public relations pressure to continue waiving costs for Covid-19 treatment." (Owens, Axios, 8/20; Ortaliza et al., Kaiser Family Foundation analysis, 8/19)