After a delayed response to the COVID-19 pandemic, the federal government has significantly picked up the pace. In the space of three weeks, Congress enacted three stimulus bills: An $8.3 billion emergency appropriations bill (March 6), the Families First Coronavirus Response Act (March 18), and the Coronavirus Aid, Relief, and Economic Security (CARES) Act (March 27). The second and third stimulus bills followed the lead of several states and expanded private insurance coverage of COVID-19 testing and related services. However, the federal law includes several loopholes that could expose consumers who seek COVID-19 tests to high and unexpected costs. At a point when easily accessible, widespread testing is critical to bringing the virus to heel, eliminating these potential financial barriers should be high on the priority list for any additional Congressional action.

Loopholes in Federal COVID-19 Coverage Requirements Could Expose Consumers to Unexpected Costs

Average deductibles for employer-based coverage are over $1600; they are even higher for individual market coverage, averaging over $5300. These high out-of-pocket costs can result in many people delaying or forgoing necessary care, including COVID-19 tests. To address this concern, the Families First Act requires group health plans (including self-funded employer plans) and individual market insurers to cover and waive cost-sharing for FDA-approved diagnostic testing for COVID-19. In an acknowledgment of the need to get more tests into the field quickly, the CARES Act expands this requirement to include non-FDA approved tests that are seeking emergency use authorization, state-developed tests, and any other tests approved by HHS. The legislation also requires health plans and insurers to cover items and services delivered during a provider office, urgent care, or emergency room visit that result in an “order for or administration of” a COVID-19 test. They also must cover such services if they are delivered via telemedicine. These bills are helpful and – one hopes – will encourage more privately insured consumers to seek a COVID-19 test, but they include loopholes that could trap many consumers into owing unexpected medical bills.

The “We’re Out-of-network” Loophole

The federal protection against cost-sharing for testing services does not clearly apply if the consumer is screened by an out-of-network provider. Federal law now requires insurers to pay the full list price of out-of-network lab tests, but not for out-of-network screenings or other related services. Thus, if a consumer visits an out-of-network urgent care center, emergency room, or drive-up testing site and is examined by an out-of-network provider, they could face significant out-of-pocket costs. The federal law also doesn’t prohibit these providers from balance billing patients, exposing them to additional surprise charges. At least one state – Maine – requires insurers to waive cost-sharing for testing services delivered by out-of-network providers, but that protection only applies for people enrolled in state-regulated health plans.*

The “Not Approved for a Test” Loophole

Due to a lack of testing capacity and supplies, many people who present with symptoms associated with COVID-19 are not approved for a test, or are told to come back for a test only if their symptoms worsen. However, the federal requirement that insurers waive cost-sharing only applies if the medical visit results in an order for or administration of a COVID-19 test. This means that many consumers could face cost-sharing for trying, but failing, to receive a COVID-19 test or an order for a test.

The “Let’s See if You Have the ‘Flu” Loophole

The symptoms of COVID-19 are similar to the symptoms people might have for influenza, pneumonia, other respiratory conditions, or even heart problems. In many cases, patients are referred first for tests to rule out these other conditions (see lack of COVID-19 testing capacity, above). However, the federal law only applies to items and services that are “related to” an order for or administration of a COVID-19 test. If the patient receives services or tests in an attempt to rule out or diagnose other conditions, this law does not appear to protect them. A few states, such as New Mexico, Washington, and Alaska, are requiring insurers to waive cost-sharing for tests for similar conditions, but such requirements only apply to state-regulated plans.

The “Trumpcare” Loophole

The Trump administration has promoted alternatives to ACA-compliant coverage, such as short-term health plans. These plans, although cheaper for many people than ACA plans, do not cover pre-existing conditions and are not required to cover a comprehensive set of benefits. Although no good data is available about how many people are enrolled in these and other alternative coverage options (such as health care sharing ministry coverage or fixed indemnity products), their documented aggressive marketing tactics make it likely that millions of Americans are enrolled. However, the stimulus bill requiring insurers to cover and waive cost-sharing for COVID-19 testing services does not apply to insurers selling these alternative products. Consumers in these plans could find themselves on the hook for unpaid bills associated with testing services, as well as the cost of treatment.

The Uninsured Loophole

Prior to the COVID-19 crisis, there were approximately 28 million uninsured people in the U.S. With 10 million people filing jobless claims in just the last two weeks of March, that number has likely risen. The stimulus bills enacted last month included some, but insufficient, efforts to expand coverage to the uninsured. These included a narrow expansion of Medicaid (at state option) to cover COVID-19 testing for the uninsured and a federal program to pay claims for COVID-19 testing for the uninsured. The CARES Act also includes a $100 billion bailout fund for hospitals. Although that fund was originally intended to help cash-crunched hospitals stay afloat amidst the crisis, the administration announced that the fund would be used to reimburse hospitals for testing and treating uninsured COVID-19 patients. At the same time, the administration has declined to open up the ACA marketplaces in the 38 states where it operates Healthcare.gov, where people could sign up for comprehensive, subsidized coverage. In contrast, all but one of the state-based marketplaces have opened up enrollment windows for the uninsured.

Looking Ahead

Public health experts are unanimous: widespread, accessible, affordable testing for COVID-19 for both symptomatic and asymptomatic individuals will be critical to our ability to beat this virus over the long term. No one, whether they are insured or not, should ever have to fear they will face a high or unexpected medical bill if they seek out a test. The Trump administration could fix some of the above-discussed loopholes through guidance or rulemaking. For example, the administration could clarify that insurers must waive cost-sharing for out-of-network services if an in-network provider is not easily accessible. Absent this, Congress should act to close these testing-related loopholes, possibly in a fourth stimulus bill, currently under discussion.

*States are preempted from regulating self-funded employer plans under the federal Employee Retirement Income Security Act. An estimated 61 percent of people enrolled in employer-based coverage are in plans exempt from state regulation.