Health insurers and employers are wary of the costs—and the potential for price-gouging—in President Joe Biden’s plan to require private insurance to cover the full cost of at-home Covid-19 tests.
Kristine Grow, spokeswoman for America’s Health Insurance Plans, said in a statement that the trade group wants to ensure “that price gouging does not spread to OTC [over-the-counter] tests, that consumers are protected from higher premiums, and that clear rules and guidance allow these efforts to be implemented effectively.”
The plan, announced Thursday, is a key piece of Biden’s announcement of actions aimed at protecting the nation against an anticipated winter surge of Covid-19 cases stemming from the delta and, possibly, omicron variants.
It requires that the more than 150 million Americans with private health insurance can get reimbursed for at-home tests during the public health emergency. The departments of Health and Human Services, Labor, and Treasury are to issue guidance on the requirement by Jan. 15.
Large employers echoed AHIP’s concerns.
“ERIC is concerned about the potential costs this will impose on employers and the possibility of price gouging of COVID-19 testing,” Annette Guarisco Fildes, president and CEO of the ERISA Industry Committee, said in a statement. The group represents large employers that provide employee benefits.
“We urge the Administration to ensure employers are not subject to unjustified charges relating to any COVID-19 testing,” she said.
Employers ‘Gulp Hard’
Covering the underlying cost of testing is often overlooked when insurers and group health plans are required to pick up the bill, although over-the-counter tests are generally cheaper than other types of Covid-19 tests.
“Most corporations are very strongly in favor of doing what it takes to keep the economy open and running,” Scott Conard, chair of the National Alliance of Healthcare Purchaser Coalition’s medical director advisory council and co-founder and partner of data analytics firm Converging Health LLC in Dallas, said.
However, “They gulp hard and take a deep breath when they see that they’re going to be required to pay for testing, because they don’t know what the costs are right now for the tests,” Conard said.
“We’ve got a finite supply, and we just created a massive demand, and if the prices start to skyrocket and they’re being forced to pay for it, it could cause significant economic hardship, for particularly companies that are low-margin,” such as manufacturers or service companies, Conard said.
The White House said that Biden in September directed more than $2 billion to accelerate the production of rapid tests and an additional $1 billion to procuring at-home tests. During the same period, the Food and Drug Administration authorized five additional over-the-counter tests, it said. A total of eight tests are on the market today, it said.
“We are on track to quadruple the supply of rapid at-home tests that we had in late-Summer,” it said.
Guidance Details Important
Ilyse Schuman, senior vice president for health policy with the American Benefits Council, said, “There are still some important details about the forthcoming guidance we need to know to really understand the impact on employers.”
The Biden administration’s rule for requiring companies with at least 100 workers to ensure their workers are either vaccinated or tested weekly, which is on hold due to a court challenge, doesn’t appear to conflict with the directive issued Thursday, Schuman said.
Under that requirement, companies can require unvaccinated workers to pay for their own testing.
Schuman pointed to the White House statement, which said, “Workplace screening would remain consistent with current guidance.”
The Occupational Safety and Health Administration rule allowing employers to require unvaccinated workers to pay for their own tests is separate from prior rules issued under the Coronavirus Aid, Relief, and Economic Security (CARES) Act and the Families First Coronavirus Response Act, which require insurers and group health plans to cover diagnostic testing without cost-sharing by beneficiaries, Schuman said.
But Mark Wilson, vice president of health and employment policy for the HR Policy Association, which represents human resource officers of more than 390 large employers, said in a statement, “President Biden’s announcement today about at-home testing raises a number of questions including if employers will be able to limit reimbursement to proctored at-home tests, which are required by the currently stated OSHA ETS,” or emergency temporary standard.
—With assistance from Jeannie Baumann