Health insurance companies in Minnesota are shifting more costs of COVID care to patients as health plans begin to address some expenses from pandemic disease like those with other ailments.
The move means a growing number of Minnesota residents who are sick with the virus are joining patients across the country to pay for part of their pandemic health care out of pocket.
Since January 1, state non-profit insurance companies have required patients covered by individual and certain employer groups’ health plans to pay deductibles, deductibles and co-insurance when seeking care for COVID-19.
The wide availability of vaccines, which have been shown to help people avoid serious illness and hospitalizations, prompted the latest change, health plans say.
“COVID vaccinations are a great way for Minnesota residents to protect their health, stay out of the hospital and avoid the potentially big bill,” the Minnesota Council of Health Plans, a trade group for nonprofit insurers, said in a statement.
These fees were previously waived due to an agreement reached in April 2020 between the state and the insurance companies. Such fees are described as “cost sharing” by the insurance industry.
The shift does not mean the pandemic is over.
Enrolled in health plans continue to receive COVID-19 testing at no cost sharing. The industry group says some people in Medicare and Medicaid health plans will continue to see cost-sharing fees waived for emergency COVID-19 treatment and hospitalizations until the public health emergency ends. And there is no cost-sharing for patients in any plan who receive certain monoclonal antibody treatments that can prevent the worst disease.
Still, the decision from the Minnesota health plans matches the national tendency to reintroduce cost sharing in several areas, said Cynthia Cox, a vice president at the Kaiser Family Foundation in California.
“Only a relatively handful of insurers are still waiving costs by the end of 2021, so I would be surprised if there are many left who are still waiving those costs now,” Cox said in an email.
“The issue of cost sharing during the pandemic raises questions of justice,” she added. “On the one hand, if so many people are susceptible to a potentially serious viral infection, is it so reasonable for insurance companies to make patients face a deductible? On the other hand, why should a cancer patient have to pay their deductible if a COVID-19 does not the patient? “
Giving up cost-sharing was necessary early in the pandemic to remove barriers to treatment for patients, said Lucas Nesse, executive director of the Minnesota Council of Health Plans. Now that vaccines are widely available, it makes sense to reintroduce co-pays, deductibles and co-insurance fees because they help moderate the cost of monthly premiums, he said.
“The lower the premiums, the more sign-ups there will be,” Nesse said. “Having a broader enrollment leads to stable insurance pools and wider access to care.”
Plus, by continuing to forgo cost-sharing, insurers can worry about creating a “moral hazard,” said Sayeh Nikpay, a health economist at the University of Minnesota.
If patients know health insurance will not make them pay for COVID-19 treatment themselves, Nikpay said they may be less motivated to get vaccinated.
Although the moral danger does not apply to everyone, she said.
“There will be some people who will continue to become seriously ill when they receive COVID, even when they have been fully vaccinated and have received a booster because they have underlying comorbid conditions,” Nikpay said in an email. “So this policy is a bit of a sluggish instrument – some people may be taken to be vaccinated, but others will face increased financial risk from cost-sharing to COVID-related treatment.”
In the early days of the pandemic, the Kaiser Family Foundation estimated Individuals with employer coverage who were admitted to COVID-19 treatment in hospitals could routinely face their own costs in excess of $ 1,300. At the time, insurance companies had several possible motives for eliminating this financial risk, Cox said.
Some considered it probably the right thing to do, she said, while others saw that some excess profits at the time would still have to be returned to consumers in the form of discounts.
COVID-19 can result in a wide range of expenses depending on the severity of the disease.
From 2020 to 2021, the estimate in Minnesota for the median amount paid by health plans for outpatient COVID-19 treatment was around $ 975, according to a analysis by FAIR Health, a New York-based nonprofit group. The estimate includes laboratory, medical and emergency care services for patients diagnosed with COVID-19 who do not require hospitalization, according to a December report.
Medical bills skyrocket as cases become more serious. In Minnesota, the median for COVID-19 patients in need of non-complex hospitalization was $ 17,906. For patients admitted to the hospital with complex cases, the statewide median jumped to $ 87,451.
Complex inpatient treatment for the most severe COVID-19 cases refers to patients who are hospitalized and require a stay in a ventilator and / or intensive care unit, according to FAIR Health. The group uses claims data to estimate what insurance companies pay to health care providers for medical services.
At Minnetonka-based Medica, day-to-day admissions totaled about $ 83 million in COVID-19 spending between October 2020 and September 2021. On average, Medica pays about 92% of the cost of medical claims, while patients pay the remaining 8% through cost sharing of payments directly to healthcare providers.
So the decision to waive cost-sharing for COVID-19 patients resulted in an expense for the health insurance company, as Medica paid the fees to doctors, clinics and hospitals, said Dr. John Piatkowski, a medical director at the health plan. Medica does not yet have complete data on their COVID-19 costs for 2021.
Medica began demanding that patients pay cost-sharing on Oct. 1, given the widespread availability of vaccines, he said.
“[We] really felt that when it was controllable and we saw the different populations being able to control their risk, it really started to look like some of our other medical conditions, “Piatkowski said.” We just wanted to be consistent across our policyholders. “
Eagan-based Blue Cross says it has paid about $ 200 million in COVID-19 treatments, the vast majority of which goes to hospital treatment.
“Because vaccines are now widely available and have been shown to drastically reduce the likelihood of serious illness, we felt it was an appropriate time to transfer COVID-19 treatment coverage to standard coverage,” Blue Cross said in a statement to Star Tribune. “While the omicron variant has led to several breakthrough infections, vaccines are still proving to be extremely effective in preventing serious illness – including hospitalization and death – from the COVID-19 virus.”
The sex nonprofit health plans in Minnesota – Blue Cross and Blue Shield of Minnesota, HealthPartners, Hennepin Health, Medica, Sanford Health Plan and UCare – take different approaches to COVID-19 cost sharing within Medicare and Medicaid health plans.
Patients with questions should contact their insurance company.