Opinion: Expand medical coverage during pandemic

A. Mark Fendrick and Beth Shrosbree

The coronavirus pandemic will exacerbate the financial situations of the millions of Americans who struggle to afford their medical care. Driven in part by rising health plan deductibles, 1 in 3 Americans reported not receiving medical care due to cost in 2019. This number is even higher for those who are financially insecure or chronically ill.

Fortunately, the Families First Coronavirus Response Act eliminates consumer cost-sharing for COVID-19 testing, but does not protect infected individuals that need COVID-19 related care. The Kaiser Family Foundation estimates that the average out-of-pocket costs for a COVID-19 associated hospitalization would be $1,300 for those who receive health insurance from their employer.

However, the inability to afford essential services is not limited to those with commercial insurance. In 2016, the average out-of-pocket spending for Medicare enrollees — those at highest risk for COVID-19 — was $5,460. As 40% of Americans do not have $400 to cover unexpected expenses, the growing number of vulnerable Americans facing thousands of dollars in out-of-pocket costs for health care raises great concern.

Policy solutions are available to quickly mitigate this problem acutely exacerbated by the COVID-19 pandemic. The immediate implementation of commonsense, value-based insurance design reforms can ensure that those in need will be able to better afford critical clinical services.

One notice recently implemented by the Trump administration reduces or eliminates out-of-pocket expenses during the pandemic. It allows high deductible health plans (HDHPs) to cover patient cost-sharing requirements — such as copays or co-insurance fees — for COVID-19-related testing and treatment. Previously, plans were prohibited from covering these services before patients reached their deductible — ranging anywhere from $1,400 to $6,900.

"It's time for public and private health insurers to revisit their benefit designs and shoulder a larger part of the cost of essential medical care," the authors write.

Another recent policy notice helps broadly lower patients’ financial burden. It expands the list of chronic disease medications and services that HDHPs can cover before patients meet their plan deductible. In addition, the administration’s recent Medicare Part D Senior Savings Model could also reduce the out-of-pocket cost of insulin for approximately 3 million Americans.

Some worry that more generous coverage of high-value medical care will increase health system expenditures and raise health plan premiums. However, this enhanced coverage can be funded relatively easily by reducing just a portion of the $345 billion spent annually on low-value or wasteful clinical services.

The solution is a popular benefit design model — VBID-X. The model can identify low-value care and increase access to high-value services, without raising total plan costs or deductibles. HHS recently declared support for including V-BID X principles in marketplace health plans.

This pandemic has uncovered a flaw in current benefit designs that do not provide affordable coverage for critical services — including care to treat COVID-19 related illness. Now that COVID-19 has exposed this problem to all Americans, it’s time for public and private health insurers to revisit their benefit designs and shoulder a larger part of the cost of essential medical care.

Dr. A. Mark Fendrick is director of the University of Michigan Center for Value-Based Insurance Design. Beth Shrosbree is a research associate.