White House requiring insurers to cover at-home COVID-19 testing costs

Photo: Violeta Stoimenova/Getty Images

The Biden Administration on Monday announced it is requiring insurance companies and group health plans to cover the cost of over-the-counter, at-home COVID-19 tests, so people with private health coverage can get them for free starting Jan. 15.

The new coverage requirement means that most consumers with private health coverage can go online or to a pharmacy or store, buy a test, and either have it paid for up-front by their health plan or be reimbursed for the cost by submitting a claim to their plan.

What the administration hopes to achieve is to incentivize insurers to cover these costs up-front and ensure patients don't need an order from their providers to access the tests for free.

WHAT'S THE IMPACT?

Beginning Jan. 15, those with private health insurance coverage – or covered by a group health plan who purchase an over-the-counter COVID-19 diagnostic test authorized, cleared or approved by the U.S. Food and Drug Administration – will be able to have those test costs covered by their plan or insurance. 

Insurance companies and health plans are required to cover eight free over-the-counter, at-home tests per covered individual per month. That means a family of four, all on the same plan, would be able to get up to 32 of these tests covered by their health plan per month. 

There is no limit on the number of tests, including at-home tests, that are covered if ordered or administered by a healthcare provider following an individualized clinical assessment, including for those who may need them due to underlying medical conditions.

Over-the-counter test purchases will be covered in the commercial market without the need for a provider's order or individualized clinical assessment, and without any cost-sharing requirements, such as deductibles, copayments or coinsurance, prior authorization or other medical management requirements.

As part of the requirement, the administration is hoping to incentivize insurers and group health plans to set up programs that allow people to get the over-the-counter tests directly through preferred pharmacies, retailers or other entities with no out-of-pocket costs. Insurers and plans would cover the costs up-front, eliminating the need for consumers to submit a claim for reimbursement.

When plans and insurers make tests available for up-front coverage through preferred pharmacies or retailers, they are still required to reimburse tests purchased by consumers outside that network, at a rate of up to $12 per individual test (or the cost of the test, if less than $12). For example, if an individual has a plan that offers direct coverage through their preferred pharmacy but that person instead purchases tests through an online retailer, the plan is still required to reimburse them up to $12 per individual test. Consumers can find out more information from their plans about how their plans or insurers will cover over-the-counter tests.

State Medicaid and Children's Health Insurance Program programs are currently required to cover FDA-authorized at-home COVID-19 tests without cost-sharing. In 2021, the Biden Administration issued guidance explaining that State Medicaid and Children's Health Insurance Program (CHIP) programs must cover all types of FDA-authorized COVID-19 tests without cost-sharing under CMS' interpretation of the American Rescue Plan Act of 2019. 

Medicare pays for COVID-19 diagnostic tests performed by a laboratory, such as polymerase chain reaction (PCR) and antigen tests, with no beneficiary cost-sharing when the test is ordered by a physician, non-physician practitioner, pharmacist or other authorized healthcare professional. People enrolled in a Medicare Advantage plan should check with their plan to see if their plan offers coverage and payment for at-home, over-the-counter COVID-19 tests.

The effort is part of a broader initiative to expand testing access. The U.S. Department of Health and Human Services is providing up to 50 million free, at-home tests to community health centers and Medicare-certified health clinics for distribution at no cost to patients and community members. The program is intended to ensure COVID-19 tests are made available to populations and settings in need of testing. 

HHS also has established more than 10,000 free community-based pharmacy testing sites around the country. To respond to the Omicron surge, HHS and FEMA are creating surge testing sites in numerous states.

REACTION

From the beginning, insurers have taken action to cover testing costs to diagnose and treat COVID-19, said Matt Eyles, president and CEO of America's Health Insurance Plans (AHIP).

"We learned a great deal through that commitment and other key actions on COVID-19, and we recognize that the administration's guidance takes steps to mitigate the real risks of price-gouging, fraud and abuse, which would limit access and reduce affordability for everyone," he said.

Insurers would work quickly to implement the guidance in ways that limit any confusion or challenges for consumers, and AHIP will work with the administration to overcome any hiccups in the early days of the requirement, Eyles said.

"Testing plays an important role in protecting the public health, but we all know we cannot test our way out of this pandemic," said Eyles. "COVID-19 vaccines are safe, effective and free, and we encourage everyone to talk with their clinicians about vaccines and boosters. Working together, we will overcome the COVID-19 crisis."

Blue Cross Blue Shield Association President and CEO Kim Keck voiced concern about supply. "There's no question that in this public health crisis, Americans need access to COVID-19 tests. We appreciate the administration's efforts to address this challenge, including measures to protect against price-gouging and abuse. That being said, we are concerned that the policy does not solve for the limited supply of tests in the country and could cause additional consumer friction as insurers stand up a program in just four days' time," Keck said.

There's a large demand for COVID-19 testing, with many consumers waiting in long lines and questioning President Biden's promise to have free tests available by mail starting in January.

THE LARGER TREND

Private insurers are already covering the expensive PCR test at a doctor's office. 

Production of rapid tests, including at-home tests, has increased because of funding from the Defense Production Act. There are now at least eight at-home tests on the market, and while their price is coming down, it's not good enough, Biden said in December.

Biden referred to his federal vaccination requirement getting ousted at the time by court decisions.

"And while my existing federal vaccination requirements are being reviewed by the courts, this plan does not expand or add to those mandates – a plan that all Americans, hopefully, can rally around," he said.

COVID-19 has become a divisive, political issue, he said.
 

Twitter: @JELagasse
Email the writer: jeff.lagasse@himssmedia.com