The Biden administration is selling a key part of its pandemic strategy as free at-home Covid-19 tests for all. The reality may be far different, adding hurdles for Americans who buy over-the-counter tests and potentially increasing test costs to the health care system.
The administration wants to require private health insurers to reimburse customers who buy rapid tests that have been in short supply in many parts of the U.S. and cost more than they’re sold for abroad. One popular test, by Abbott, costs about $24 for a box of two tests, but many other countries subsidize at-home tests or provide them for free.
It’s unclear how consumers with private insurance will get reimbursed for tests, how long they’ll have to wait — and how often payment claims will be denied. And those who are uninsured or who have Medicare or Medicaid won’t be able to access the new insurance reimbursement program, though administration officials say they’ll have free access through local health care clinics.
“We should not think for a minute that this is some sort of magic bullet that is going to get us to universally free and accessible testing,” said Sabrina Corlette, co-director of the Center on Health Insurance Reforms at Georgetown University’s McCourt School of Public Policy.
Many specifics hinge on guidance the Health and Human Services, Labor and Treasury departments are due to publish by Jan. 15.
Jeff Zients, the White House Covid-19 coordinator, said Friday that the Biden strategy is “making at-home tests free to Americans.”
“More than 150 million Americans on private health insurance will be able to submit receipts for at home tests directly to their health insurance plans,” he said. “They can go to their local pharmacy, they can order online and then get reimbursed.”
Spokespeople for major health insurers including Aetna and Blue Cross Blue Shield say their companies are awaiting guidance and will work with the administration on implementation.
Michael Bagel, director of public policy at the Alliance of Community Health Plans, told POLITICO that insurance companies support increasing access to medically necessary Covid-19 testing, but warned setting up a system for consumers to get reimbursed for at-home tests they buy will be operationally challenging for many payers.
Nirav Shah, the director of Maine’s Center for Disease Control and Prevention, said the reimbursement model has the potential to work well as long as home tests are readily available and have their insurance charged immediately. But that is not likely to happen — the White House says most people will have to submit receipts to health plans.
“It’s going to have to work its way through that manual submission process, which could take weeks or a couple of months depending on volume,” Bagel said.
Involving insurance companies may also cause the price of tests to rise.
Michael Mina, chief science officer at eMed and a longtime proponent of at-home tests, said the effort to expand access to rapid tests is a step in the right direction, but questioned why the federal government is not directly contracting with diagnostic companies and distributing home tests directly to the public at low or no cost.
And Georgetown’s Corlette said the new rule, while laudable, may make the tests more expensive because of how pandemic relief bills were written. Some experts also are concerned consumers will become less price sensitive if they know their health insurance will cover the cost of at-home tests.
“We know that health insurance in our normal health care system makes pricing just kind of exceptional, it enables prices to just be out of control,” Mina said. “This runs the risk of preventing the pressure for economic competition among the companies.”
Bagel, the insurer policy executive, cautioned that the Biden strategy will mitigate the cost of at-home tests in the short term, but will likely lead to higher health insurance premiums in the future.
But Mara Aspinall, an adviser to the Rockefeller Foundation and member of testmaker OraSure Technologies’ board of directors, said Biden’s plan is an effort to “pull every lever” to make tests more accessible to Americans. The Biden administration already invested billions into the testing supply chain and firms are working to ramp up supply, she said.
“We’re at a precarious point. We need manufacturers to make good on the supply expectations, which means manufacturing the tests, kitting them and getting them ready for distribution,” Aspinall said. “I think that if there are hiccups, we have disruption.”
Ellume CEO Sean Parsons — whose company was the first to receive emergency use authorization for an over-the-counter test last year — also said Biden’s plan will help manage outbreaks and alleviate pressure on health care systems.
Demand for the popular tests shows no sign of cresting. More than 96,000 positive cases are being recorded per day and more cases of the new Omicron variant are being detected.
Rachael Fleurence, special assistant to the NIH director for Covid-19 diagnostics, told POLITICO the 800,000 free home tests allotted for New Hampshire through a study researching the effect of distributing free at-home tests were ordered through Amazon within 24 hours earlier this week.
“We’re pretty positive that the administration’s efforts are bearing fruit, it just does take time because [manufacturers] are ramping up production lines,” Fleurence said. “It was highly successful and rapid in New Hampshire, but if we were across the country we would be seeing varying rates of response.”
Another challenge for insurers will be determining if at-home tests being submitted for repayment are for workplace screening, which they are not required to cover under Biden’s plan.
“We may be able to identify patterns eventually, but it would put a significant operational burden on health plans, and also a financial burden,” Bagel said.
The decision to involve private health insurers may expand access to tests for some, but Americans on public insurance and the uninsured will have to seek out free home tests that the government is distributing to community sites and health clinics.
“This is like the most American way to deal with this pandemic,” Mina said. “It’s not efficient, it runs major risks of creating inequities in access when there are just much more simple solutions.”
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