By Sabrina Corlette and Kevin Lucia

The novel coronavirus, or COVID-19, is putting our health care system to the test. In addition to questions about whether our hospitals, doctors, and other care facilities have the capacity to adequately care for people and limit the spread of the disease, our patchwork quilt system of insurance coverage and shaky safety net* pose serious public health risks. There are roughly 28 million uninsured people in our country, many of whom may delay or forego testing and treatment due to concerns about cost. Many of those with private coverage will face high deductibles or surprise medical bills if they seek care. Unfortunately, at this time the federal government appears unlikely to act sufficiently or quickly enough to fill these serious holes in our system of coverage. However, there may be actions states can take to lower the financial barriers that may inhibit people from seeking medical advice and treatment.

Federal Efforts: A Day Late and a Dollar Short

Congress has taken an important step by passing an $8.3 billion emergency funding package to help combat the virus. The funding will be available to support the development of a COVID-19 vaccine, treatments, and tests. However, the legislation does not include any requirements that private insurers, who cover most Americans under age 65, provide coverage of said tests, treatment, or a future vaccine, nor does it place any limits on the cost-sharing that plan enrollees might be exposed to for these services, such as deductibles or coinsurance.

The Trump administration has tried to reassure the public that private insurers would be required to cover the coronavirus test as an essential health benefit (EHB) under the Affordable Care Act (ACA). The irony of this statement aside (given that this administration has done everything in its power to repeal the ACA and roll back the EHB standard), such a requirement will have very limited impact.

First, there’s nothing new here. The ACA’s EHB requirement has always included laboratory services as an essential benefit, meaning that plans that must offer EHB would probably already cover a test to detect COVID-19. Second, the law’s EHB requirement applies only to individual market policies and to small employer plans. The law does not require large and self-funded employer-sponsored plans to cover EHBs, which is where most Americans with employer coverage are insured. Third, short-term limited duration (STLDI) and other non-ACA compliant coverage options, which have been promoted by the Trump administration as alternatives to ACA coverage, do not have to cover EHB. (They can also refuse to renew the plan for someone based on their health status). Lastly, just because a service is a covered benefit does not mean consumers won’t face high out-of-pocket costs. The average deductible in an ACA bronze-level plan is close to $6000, while deductibles for employer-based plans have doubled over the last decade.

Can States Save the Day? Opportunities and Limitations of State Action Related to Private Insurance

Although there’s little in the way of a coordinated or effective federal action to address insurance coverage gaps, many states can – and a couple already have – step up to help consumers. New York’s Governor Cuomo has announced that his state’s insurance department will soon issue emergency rules prohibiting private insurance companies from imposing cost-sharing on enrollees when they visit a doctor’s office, urgent care center, or emergency room to seek COVID-19 testing.

The New York directive will also:

• Require insurers to cover telehealth services, so that patients can receive medical advice without having to leave their home.
• If a vaccine becomes available, require insurers to cover the cost for children under 19, and ask insurers to cover the vaccine with no cost-sharing for adults.
• Require coverage of off-formulary prescription drugs, if no on-formulary drug is available, due to supply chain problems, to treat the enrollee.
• Remind insurers that they must hold enrollees harmless for surprise medical bills from out-of-network providers.
• Require insurers to check their provider networks, to make sure they are prepared to handle a potential increase in the need for health care services.

Washington’s insurance department has issued a similar emergency directive, requiring both ACA-compliant and short-term plans to cover coronavirus testing before the deductible and without cost-sharing, and to remove any limits on enrollees’ ability to get prescription drug refills if they’re needed to maintain an adequate supply.

Both state insurance departments are operating under their Governor’s emergency declarations or directives. Not all states have declared such emergencies, and in the absence of that, or of legislative action, many state insurance departments may lack authority to issue similar directives. Furthermore, states only have the power to regulate fully insured individual and group market health plans. Under federal law, they cannot impose requirements on self-funded employer health plans, where over 60 percent of people with employer-based coverage are insured. Insurance departments must also balance coverage requirements for insurers with their obligation to make sure that insurance companies remain financially solvent.

States that run their own health insurance marketplace could also consider, as an emergency measure, creating a new special enrollment period (SEP) so that uninsured individuals who missed the annual open enrollment period (which ended Dec. 15, 2019) can enroll in a plan and, if eligible, obtain federal subsidies to help reduce premiums and cost-sharing. States that use the federal marketplace platform, Healthcare.gov, do not have that autonomy.

Looking Ahead

For better or worse, our country has a patchwork system of health coverage that leaves millions uninsured and millions more facing high costs any time they seek care. Congress and the Trump administration have tools, if they choose to use them, to fill some of the gaps that exist in private coverage, and, for people in self-funded employer plans, they’re the only ones with the power to do so. The federal government is also the only entity with the financial wherewithal to compensate providers for treating the uninsured. However, states are not powerless. As New York and Washington have demonstrated, there are steps they can take to lower the financial barriers that could keep some privately insured individuals from seeking the care they need.

*Medicaid, Medicare, the Indian Health Service, and other publicly financed programs make up important elements of the health care safety net. While the focus of this post is on government action with respect to private insurance, it is important to note that improving access to Medicaid, in particular, will be critical to help people who currently do not have coverage get access to the testing and care they need.