As the initial COVID-19 vaccine doses become available to the public, it will be important to ensure people are aware that they can get the vaccine for free. New rules and legislative changes enacted since the pandemic hit eliminated cost sharing for the vaccine. However, people may still be concerned about costs because of their experiences getting COVID-19 tests and treatment. Despite rules requiring that COVID-19 tests be provided without cost sharing, some insured patients have faced unexpected out-of-pocket costs, and some uninsured patients have been left with large bills for COVID-19 treatment even with a Department of Health and Human Services’ (HHS) program in place that is intended to cover those costs. Patients were left with these bills due to gaps in the protections that Congress and the Trump administration put in place early in the COVID-19 pandemic. These gaps may lead some people to worry they could face unexpected out-of-pocket costs for the vaccine too. While making sure people trust that the vaccine is safe will be the highest priority, it will also be important to make sure that experiences with unexpected costs for COVID-19 testing or treatment do not deter people from getting vaccinated.
Loopholes that have led to out-of-pocket costs for COVID-19 testing
Gaps in the Families First Coronavirus Response Act (FFCRA) and the Coronavirus Aid, Relief, and Economic Security (CARES) Act leave some patients with private insurance unprotected when they get a COVID-19 test from an out-of-network provider—those providers are not limited in what they can charge patients and are allowed to bill patients directly for the entire cost of testing and related services, leaving insured patients to submit claims for reimbursement themselves. Federal law also does not prohibit out-of-network providers from balance billing for COVID-19 tests and related services. Instead, the law requires providers to publicly post their cash charges for testing and related services and requires insurers to reimburse the providers at their cash price if posted, but the law is silent on what insurers must pay for COVID-19 tests and related services rendered by out-of-network providers if no cash price has been posted. Additionally, COVID-19 testing may not qualify for coverage by private insurance if it is deemed to not be medically necessary, for example, testing for travel or employment. Patients with Medicare have more comprehensive coverage for COVID-19 testing with no cost sharing. This also is true for Medicaid enrollees while states are receiving enhanced federal matching funds tied to the COVID-19 public health emergency. After the public health emergency is lifted, some Medicaid enrollees may face nominal cost sharing, and some Medicaid adults (low-income parents, pregnant women, seniors, and people with disabilities who do not receive an “alternative benefit plan”) may not have coverage unless states choose to cover diagnostic tests.
Lack of comprehensive protections against out-of-pocket costs for COVID-19 treatment
In contrast to COVID-19 testing, there are few federal requirements related to COVID-19 treatment. For example, no changes were made to Medicare cost sharing rules, meaning that Medicare beneficiaries in traditional Medicare could face more than $1,400 in cost sharing if they are hospitalized for COVID-19 and do not have supplemental coverage, while those in Medicare Advantage could face higher or lower costs for a hospitalization depending on their plan. According to CMS guidance, Medicare Advantage plans may waive or reduce cost sharing for COVID-19-related treatments, and most Medicare Advantage insurers have announced that they are temporarily waiving such costs, but this is not required. While many private health insurers are also voluntarily and temporarily waiving cost sharing for COVID-19 treatment costs, privately insured patients—particularly those covered by self-insured employer-sponsored health plans—could face significant out-of-pocket expenses if they require hospitalization or other treatment for COVID-19. Additionally, privately insured patients with a confirmed or presumptive case of COVID-19 do have some protections against balance billing by out-of-network providers if the provider received federal grant funds intended to provide economic assistance during the pandemic. However, patients may not be aware of this protection and it is not clear how it is being enforced. Additional requirements were added to protect Medicaid beneficiaries from cost sharing for COVID-19 treatment. Similar to COVID-19 testing, state Medicaid agencies may not require cost sharing for COVID-19 treatment while receiving additional federal funding that is tied to the public health emergency. Once that requirement ends, Medicaid programs will be permitted to require nominal cost sharing.
Limitations in protections for uninsured COVID-19 patients
The Trump administration established a program through the federal Provider Relief Fund, to reimburse providers for care for uninsured COVID-19 patients, but narrow eligibility rules and voluntary participation by providers has limited the program’s reach. For example, only patients with a primary diagnosis of COVID-19 are eligible. Hospital groups have noted that this is particularly a problem for patients with sepsis caused by COVID-19. In those cases, coding protocols dictate that patients are coded with sepsis as their primary diagnosis and not COVID-19. Importantly, uninsured patients are not entitled to have their claims submitted to this program. Providers can decide on a case-by-case basis whether to submit claims; otherwise providers are not limited in what they can charge or try to collect from uninsured patients for COVID-19 testing or treatment. Providers that submit COVID-19 testing or treatment claims to this program are reimbursed based on Medicare rates.
Protections from cost sharing for COVID-19 vaccines
The federal government has purchased hundreds of millions of doses of COVID-19 vaccines through Operation Warp Speed, and those doses will be distributed at no cost to providers. Providers participating in the federal COVID-19 Vaccination program must agree to not charge for the federally purchased vaccine itself. Both private insurance and public programs will cover 100% of the administration fee, and providers cannot bill payers for the vaccine itself. Uninsured patients will not be charged for the vaccine and providers who wish to be reimbursed for vaccine administration must bill the federal government and cannot bill uninsured individuals. It will be important for the Trump administration and incoming Biden administration to develop plans to strictly enforce these requirements on insurers and providers to ensure that the public receives the vaccine for free as intended. The federal government should also put mechanisms in place so that any noncompliance that results in a bill to a patient can be resolved without cost or administrative burden for the patient.
As discussed in a recent KFF brief, laws and regulations ensure access to free COVID-19 vaccines for individuals regardless of their insurance status, although some of these protections are in effect only during the public health emergency or for the initial doses purchased through the COVID-19 Vaccination Program.
- Private insurance: Private insurance subject to the Affordable Care Act’s requirement for plans to cover preventive services will have to cover the COVID-19 vaccine and, during the public health emergency, that requirement extends to vaccines administered by out-of-network providers. A combination of federal standards also limited what providers can charge for COVID-19 vaccine administration if they are out-of-network; federal regulation establishes Medicare rates as a reasonable reimbursement rate for the COVID-19 vaccine and administration fee. In addition, to receive or administer COVID-19 vaccines, providers must enroll in the federal COVID-19 Vaccination Program; conditions for participating in this program prohibit balance billing of insured patients for any amounts not covered by their insurance.
- Medicare: Medicare beneficiaries will have coverage for the vaccine with no cost sharing through Medicare Part B.
- Medicaid: Medicaid must cover the vaccine with no cost sharing as long as states are receiving enhanced federal funding that is tied to the public health emergency. People with limited Medicaid coverage (for example, coverage for family planning benefits only) are not covered by this requirement and are instead considered to be uninsured for the purposes of COVID-19 vaccination. Once states are no longer receiving additional federal funds tied to the public health emergency, COVID-19 vaccine coverage would be optional for some adults. If states did not opt to cover COVID-19 vaccines, those adults would likely be considered to be uninsured for the COVID-19 vaccine. While the FFCRA rules do not apply to CHIP, states must cover recommended vaccines for children with no cost sharing in their CHIP programs.
- Uninsured: People who are uninsured or do not have coverage for vaccines can obtain the vaccine for free from any provider administering the initial doses funded by the government. Providers that participate in the CDC COVID-19 Vaccination Program must agree to not seek any reimbursement from a vaccine recipient. Instead, providers can bill the Provider Relief Fund for reimbursement of vaccine administration costs for people who are uninsured. About $25 billion remains in the fund that will be used to reimburse providers for vaccine distribution, although that fund has also been used to provide grants to providers and to reimburse for care for uninsured COVID-19 patients. Once federally purchased doses through the COVID-19 Vaccination Program are used up, uninsured patients and others who do not have coverage for the COVID-19 vaccine could face out-of-pocket costs for both the vaccine and its administration.
It will be important for vaccination information campaigns to educate the public about the COVID-19 vaccine with the clear message that the initial doses will be free to everyone. Without this assurance, some people may worry they will face out-of-pocket costs for the vaccine. The CDC should also ensure that Vaccine Program providers know that they cannot directly bill patients for COVID-19 vaccine administration. This will help avoid billing errors and noncompliance with federal requirements. There will be many challenges convincing people to get the vaccine. Fear over unexpected costs need not be one of them.