Imposing The Costs Of Workplace Coronavirus Testing On Group Plan Coverage Would Place An Excessive Burden On Essential Workers

By Linda J. Blumberg, Sabrina Corlette, and Michael Simpson

For many employers, re-opening safely will require testing employees for the virus that causes COVID-19 on a regular basis. For workers in particularly high-risk settings, or in critical infrastructure jobs, such as nursing homes, meatpacking plants, and health care, public health experts have advised frequent screening and testing. The Centers for Medicare and Medicaid Services, for example, has recommended that nursing home workers be tested at least once per week. Colleges and universities are implementing “community testing” plans for faculty, staff, and students that contemplate multiple rounds of testing throughout the fall semester.

Although testing is perhaps one of the most important tools we have for re-opening businesses, universities, and schools, there is no comprehensive federal strategy for identifying which workers should be tested, how often, or how it should be financed. The federal government has largely delegated this task to states. But even if states can come up with solid plans for identifying those who need to be tested, financing the cost is no small matter. While most labs charge around $100 (the Medicare rate) for the test, some have charged thousands of dollars for a single test. One insurance industry estimate suggests that widespread COVID-19 testing to facilitate the return to work and schools will cost as much as $25 billion per year. Nursing home providers estimate that testing residents and staff just once will cost more than $672 million.

When Congress enacted the Families First Coronavirus Relief Act (FFCRA), at least some of the drafters thought that it required health insurers to cover and waive cost sharing for all COVID-19 testing. However, a subsequent interpretation by the Trump administration advises insurers that they do not have to pay for workplace testing, if the worker is asymptomatic or hasn’t been exposed to the virus. This means that employer health plans may voluntarily cover the test. If they do not, then the employer can pay for the test through other means or require the worker to pay for it. Indeed, after New York State mandated that nursing home workers be tested at least twice per week, a dispute erupted between insurance companies and the nursing homes over who would pay for it. Staff, many of whom make minimum wage, are caught in the middle. Meanwhile, many publicly funded free testing sites are starting to run out of money or lack the capacity to keep up with demand.

One solution would be for Congress to amend FFCRA to clarify that employer health plans must fully cover the cost of testing, including for workers who lack symptoms. But will this be sufficient to ensure a safe workplace? The data suggest not.

Essential Workers

We used the Urban Institute’s Health Insurance Policy Simulation Model (HIPSM) to estimate the number and share of essential workers with employer-based insurance and those uninsured prior to the pandemic. The HIPSM has been used extensively in a broad array of analyses of the Affordable Care Act (ACA) and other reforms. It is based on two years of American Community Survey (ACS) data, reweighted to reflect the most recent data from the ACS, the ACA Marketplace, and Medicaid, and aged to the current year using projections from the Urban Institute’s Mapping America’s Futures program.

However, this analysis did not require an actual policy simulation. We used the core data set of the simulation model to do tabulations of insurance coverage for workers in the specific industries. These tabulations use the model’s data, in which health insurance coverage is updated to reflect recent Medicaid and Marketplace enrollment figures by state for early 2020, but it did not involve an actual simulation of a new policy.

For this analysis, we focused on workers in 11 industries:

  • Agriculture
  • Meatpacking plants
  • Grocery stores
  • Education
  • Medical offices
  • Home health
  • Hospitals
  • Skilled nursing facilities
  • Residential care facilities
  • Child day care
  • Funeral

We found that rates of employer-sponsored insurance (ESI) coverage vary considerably across workers in different industries, as do rates of uninsurance (exhibit 1). In addition, sizable percentages of essential workers with ESI obtain that coverage not through their own employer but through a family member’s employer (exhibit 2). Thus, those workers are just a recession-related job loss away from losing the coverage they have.

Exhibit 1: Nonelderly workers in essential industries with employer-sponsored insurance and uninsured, pre-pandemic 2020

Number of Workers Pre-Pandemic Employer-sponsored coverage Uninsurance
(thousands) Number (thousands) Percent Number (thousands) Percent
Agriculture 1,476 581 39% 434 29%
Home health 1,081 482 45% 169 16%
Child day care 1,515 779 51% 203 13%
Residential care facilities 868 514 59% 94 11%
Grocery stores 2,845 1,704 60% 383 13%
Skilled nursing facilities 1,794 1,128 63% 188 10%
Funeral 119 85 71% 10 9%
Meat plants 462 331 72% 63 14%
Medical offices 4,345 3,155 73% 324 7%
Education 13,417 11,281 84% 558 4%
Hospitals 6,979 6,042 87% 244 4%
Total across 11 industries 34,902 26,081 75% 2,671 8%
All nonelderly US workers 144,967 99,186 68% 17,187 12%

Source: The Urban Institute’s Health Insurance Policy Simulation Model, 2020.

Exhibit 2: Nonelderly workers in essential industries covered by employer-sponsored insurance through own job versus family member’s job

Number with Employer Sponsored Insurance Employer Insurance Through Own Job Employer Insurance Through Family Member’s Job
(thousands) Number (thousands) Percent Number (thousands) Percent
Agriculture 581 272 47% 309 53%
Home health 482 319 66% 162 34%
Child day care 779 366 47% 412 53%
Residential care facilities 514 359 70% 155 30%
Grocery stores 1,704 1,106 65% 599 35%
Skilled nursing facilities 1,128 824 73% 304 27%
Funeral 85 47 56% 37 44%
Meat plants 331 265 80% 66 20%
Medical offices 3,155 2,049 65% 1,107 35%
Education 11,281 8,042 71% 3,239 29%
Hospitals 6,042 4,532 75% 1,509 25%
Total across 11 industries 26,081 18,181 70% 7,900 30%
All nonelderly US workers 99,186 72,109 73% 27,077 27%

Source: The Urban Institute’s Health Insurance Policy Simulation Model, 2020.

Looking at rates of employer-based insurance, workers in six of the 11 industries have lower rates than the 68 percent of all workers nationally: agricultural workers (39 percent), home health workers (45 percent), child day care workers (51 percent), residential care facility workers (59 percent), grocery store workers (60 percent), and skilled nursing facility workers (63 percent).

Looking at uninsurance rates, the early 2020 share of uninsured workers in five key industries was higher than the 12 percent national average uninsurance rate among workers: agriculture (29 percent), home health workers (16 percent), meat plant workers (14 percent), grocery store workers (13 percent), and child day care workers (13 percent). Across all 11 industries that we examined, 2.7 million workers were uninsured as of early 2020.

If workers in these essential industries were tested once per week, a lower frequency than has been suggested for major league baseball players, for example, the expected cost per worker would be $5,200, if tests were provided at the price paid by Medicare. For perspective, the average employer-based insurance premium for single coverage was $7,188 in 2019, according to the Henry J. Kaiser Family Foundation. If employer-based insurance for workers in essential industries is required to absorb these costs while maintaining typical spending on other types of care, this would imply a necessary premium increase of more than 70 percent, on average. Such a large price increase would certainly lead to dramatic reductions in insurance coverage in these industries.

To complicate matters, large percentages of these essential workers with employer-based insurance obtain that coverage through a family member, not through their own employer. For example, among agricultural and child day care workers with employer-based insurance, less than half of that coverage comes from the workers’ own employers. Across these 11 essential industries, 7.9 million workers, almost one-fourth, rely on a family member’s employer-based insurance for coverage. Thus, depending upon how testing requirements are structured, testing costs could have implications for premiums for particular employers beyond essential industries.

Essential workers who are uninsured or whose spouse loses insurance due to the COVID-19 recession may not only be without financial access to testing, but they are also likely to have limited access to necessary medical care if they fall ill, either from COVID-19 or any other condition.

Financing this testing to any significant degree through private insurance translates into essential workers bearing a disproportionate share of these costs themselves. Higher insurance premiums due to more frequent testing reduces wages and disposable income for the workers and is likely to decrease the number of these workers with employer-based insurance. And for those whose insurance coverage does not include testing and those who are uninsured, the cost of sufficient testing could well prove prohibitive.

These workers are considered as essential due to their importance for the well-being of the broader population and the functioning of the national economy, yet many earn below median wages. Consequently, asking them to bear not only higher than average health risks but also higher financial burdens for testing would be misplaced and shortsighted.

Public Funding

Direct federal government funding for COVID-19 testing, at a minimum, for workers in essential industries would spread these public health-associated costs broadly across all taxpayers. Such funding could potentially be supplemented by a broad-based assessment, for example, on all insurers and employers. By taking on this responsibility, the federal government could advance central decision making on standards for testing type and frequency for workers by industry and risk exposure, while setting appropriate prices for test administration and processing.

Absent leadership at the federal level, we would typically look to state governments to take on this responsibility, particularly since states would benefit from greater ability to reopen their economies safely and efficiently. The COVID-19 recession will, however, make this a more difficult ask for states, since tax revenues are down and the demand for an array of public services are up. With no government involvement in testing, in terms of both setting standards and financing, the economic and social recovery from the pandemic will be unnecessarily delayed while worsening population health.

Linda J. Blumberg, Sabrina Corlette, Michael Simpson, “Imposing the Costs of Workplace Coronavirus Testing on Group Plan Coverage Would Place an Excessive Burden on Essential Workers,” Health Affairs Blog, July 28, 2020, https://www.healthaffairs.org/do/10.1377/hblog20200727.300119/full/. Copyright © 2020 Health Affairs by Project HOPE – The People-to-People Health Foundation, Inc.

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