I spent over $80 on COVID-19 tests at the drug store last month. My daughter, husband and I all had the sniffles, and the $27.99 per test seemed worth it for some peace of mind that we could go to school and work without putting our friends, colleagues, and classmates at risk. But as cold and flu season brings the inevitable sore throats, runny noses, and coughs, for most families spending $80-$100 each time they feel under the weather, or want to visit grandma, or go to a concert, is far more than they can afford.

So I applauded when the Biden administration announced that they would require health plans and insurers to reimburse consumers for the costs of the at-home COVID-19 tests. Doing so could help a lot of families. But it’s by no means a silver bullet; financing these tests through a cumbersome reimbursement process is about the most inefficient, inequitable, and costly approach the U.S. could take. And it will in no way ensure the widespread, free, or even low-cost availability of these tests, which is what is key to reducing the potential winter surge of the COVID-19 virus and getting us to the other side of this pandemic.

Working with the Cards They’ve Been Dealt: Crafting National COVID-19 Testing Coverage Policy from a Misguided Statute

In March of 2020, Congress enacted two COVID-19 relief bills, the Families First Coronavirus Response Act (FFCRA) and the Coronavirus Aid, Relief, and Economic Security Act (CARES Act). FFCRA requires employer health plans and insurers to cover and waive cost sharing for COVID-19 diagnostic tests for the duration of the national public health emergency, while the CARES Act requires them to pay testing providers their full billed charges, so long as the provider posts those charges on a publicly accessible website. Unfortunately, this approach to financing COVID testing services has resulted in a patchwork of access, with many patients facing bills of hundreds of dollars or more for tests, and some providers engaging in price gouging. Further, the current policy requires people to receive an “individualized” determination from a licensed health professional that a COVID test is medically necessary, often requiring them to take a trip to a doctor or clinic and potentially receive (and be charged for) additional medical services.

In January of 2022, the Biden administration is expected to require health plans and insurers to cover and waive cost-sharing not just for COVID-19 tests administered in a clinical setting, but also for those that consumers purchase for in-home use. This new policy will help fill some of the gaps in our current system of testing coverage, but certainly not all. Challenges associated with this approach include:

• Inequitable coverage. The proposed policy is only for people who have private health insurance (either through an employer-sponsored plan or Affordable Care Act individual market plans). Those who are uninsured, or who have other forms of coverage such as Medicaid, Medicare, Tricare, and short-term plans will not have the same financial protection.
• Cumbersome process. Under this policy, individuals will have to pay for the at-home tests up front, save their receipts, conduct research on their plan’s procedures for getting reimbursed, either upload or mail in proof of purchase, and then wait—potentially for many weeks—to receive reimbursement. Some families may have the time and financial means to go through this process. Many will not.
• Time-limited. Health plans and insurers will only be required to reimburse their enrollees for at-home COVID tests for the duration of the public health emergency, which is currently slated to expire in January 2022. It is likely the Biden administration will extend the public health emergency for another 90 days, to roughly mid-April. When it ends, so will the mandate for insurers to cover COVID-19 tests, including at-home tests.
• Higher premiums. Not only are insurers required to reimburse consumers for 100 percent of the cost of the test, the CARES Act requires them to pay whatever price the manufacturer chooses to charge for the test, plus any markup by the retailer. Although it is too late now for insurers to adjust premiums for 2022, they will inevitably find a way to pass on these costs to all of us in the form of higher premiums in 2023.

Not the Way to Run a Railroad: We Need a National Program to Finance and Equitably Distribute COVID-19 Tests

COVID-19 testing can and should be a critical part of our national strategy to beat back this pandemic. Unlike vaccinations, these tests can be broadly administered without the necessity of a health professional being present. In many other countries, COVID-19 tests are broadly available and publicly subsidized. That should be the U.S.’ goal, too.

Yet we continue to rely on the traditional health insurance model as the financing mechanism for COVID-19 tests. The result is a deeply inequitable and gap-ridden response to the COVID-19 public health crisis. I have called for a national testing program, financed by a broad assessment on insurers, employers, and taxpayers, that would purchase testing supplies and reimburse providers for testing costs based on Medicare rates. Providers administering the tests could be required to accept this reimbursement as payment in full, and prohibited from charging patients, regardless of their insurance status or source of coverage. This is not all that different from the approach the U.S. has taken with COVID-19 vaccines: the federal government has negotiated a price for the vaccines with the manufacturers, and providers can bill insurers for the cost of vaccine administration but must accept the insurer’s payment as payment in full (with the Medicare rate as the benchmark), and are prohibited from charging patients for their services. What’s the result? COVID-19 vaccines in this country are widely accessible and free to all. COVID-19 tests? Not so much.