The coronavirus pandemic and resulting economic downturn is hitting the United States at a time when unexpected medical bills were already a primary concern for many Americans. Throughout the crisis, states, Congress, the Trump Administration, and private insurance plans have taken various actions to mitigate some affordability challenges that could arise from, or prevent timely access to, COVID-19 testing and treatment. In this brief, we answer key questions on affordability of COVID-19 testing and treatment for people who are uninsured and those insured through private coverage, Medicare, and Medicaid. We also explore broader concerns around deductibles, assets, and job loss.

1. How much will patients pay for COVID-19 testing?

Since the passage of the Families First Coronavirus Response Act (FFCRA) on March 18, most people should not face costs for the COVID-19 test or associated costs. Starting on March 18 and lasting for the duration of the public health emergency, all forms of public and private insurance, including self-funded plans, must now cover FDA-approved COVID-19 tests and costs associated with testing with no cost-sharing.1 This includes high-deductible health plans and grandfathered plans. Medicare also covers serology tests that can determine whether an individual has been infected with SARS-CoV-2, the virus that causes COVID-19, and developed antibodies to the virus. In addition to covering testing with no cost sharing for current Medicaid enrollees, FFCRA added a new option for states to cover testing for the uninsured through Medicaid with 100% federal financing. See the Medicaid Emergency Authority Tracker for details on which states have implemented this policy option. In addition, $2 billion was allocated to reimburse providers for testing-related costs for uninsured individuals through the COVID-19 Claims Reimbursement to Health Care Providers and Facilities for Testing and Treatment of the Uninsured Program, though this option places an additional burden on the uninsured to find a provider willing to participate in this new program.

As background, the Centers for Medicare and Medicaid Services has announced that Medicare will reimburse providers up to $100 per test, depending on the test. Newer COVID-19 tests that give results more quickly may cost providers more than the early tests. A number of private providers, including some that take no insurance, are charging substantially more than $100 for COVID-19 tests.

Out-of-pocket costs for testing have been further addressed at the federal level through the Families First Act. The Coronavirus Aid, Relief, and Economic Security (CARES) Act, enacted on March 27, 2020, expanded protections by requiring private plans to also fully cover out-of-network tests. However, the CARES Act does not prohibit out-of-network providers from billing patients directly for the COVID-19 test; if that happens, and if the up-front expense is unaffordable, it could deter some patients from getting a test. Otherwise, when providers charge cash up front, it falls to the patient to submit the bill to the health plan for reimbursement. The CARES Act requires health plans to reimburse out-of-network COVID-19 test claims at up to the cash price that the provider has posted on a public web site.

2. How much will patients pay for COVID-19 treatment?

In contrast to federal law for coverage of testing, there has not yet been comprehensive federal legislation to limit cost-sharing for treatment of COVID-19, such as hospitalization for those who become very ill.

COVID-19 treatment costs will depend on the type of coverage an individual has. Treatment costs may present a much bigger affordability concern for patients than testing. Although many people are able to recover on their own without treatment, those with more serious cases require hospitalization. Currently there is no curative treatment for COVID-19, but hospitalization to treat the symptoms of the disease could be very expensive, particularly for people who are uninsured or underinsured.

In an analysis on the Peterson-KFF Health System Tracker, we find that for people with large employer-sponsored insurance who require hospitalization for pneumonia (a common complication of COVID-19), out-of-pocket costs could top $1,300. People with private coverage through small businesses and the individual market will likely face even higher levels of cost-sharing, since they generally have larger deductibles. Some states have required all state-regulated insurers to waive cost-sharing for COVID-19 treatment, though self-funded plans (representing 61% of people with employer coverage) are not required to follow these regulations as these plans are regulated at the federal level. Additionally, many out-of-network physicians may balance bill patients for any costs beyond what the insurer is willing to pay, though providers who receive grants through the CARES Act are prohibited from balance billing for all care provided to patients with presumptive or confirmed cases of COVID-19. Our Health System Tracker analysis found that, on average, 1 in 5 in-network hospitalizations for pneumonia (one common complication of COVID-19) could result in at least one surprise bill from an out-of-network physician or other provider.

Most major insurers have voluntarily waived some or all treatment costs. A detailed list from AHIP can be found here. For self-funded plans, employers ultimately decide whether treatment costs will be covered in full or not.

Medicare beneficiaries in the traditional Medicare program who are admitted to a hospital for COVID-19 treatment would be subject to the Medicare Part A deductible of $1,408 per benefit period in 2020, as well as daily copayments for extended inpatient hospital and skilled nursing facility (SNF) stays. For extended hospital stays, beneficiaries would pay a $352 copayment per day for days 61-90 and $704 per day for lifetime reserve days. For extended SNF stays, beneficiaries would pay $176 coinsurance for each day of care for days 21-100. For COVID-19 treatment-related outpatient services covered under Part B, there is a $198 deductible and 20 percent coinsurance that applies to most services. While most beneficiaries in traditional Medicare (83% in 2017) have some form of supplemental coverage that covers some or all of these expenses, nearly 6 million beneficiaries were without any supplemental coverage in 2017, which means they would be responsible for paying all deductibles and other cost sharing directly. Out-of-network claims generally are not an issue for patients covered by traditional Medicare. Virtually all hospitals, doctors, and labs participate in Medicare and balance billing is prohibited or subject to tight limits under the program. For the more than one-third of all beneficiaries in Medicare Advantage plans, cost-sharing requirements for inpatient care typically vary across plans, often based on the length of stay. In response to the COVID-19 emergency, most Medicare Advantage insurers are voluntarily waiving cost sharing for COVID-19 treatment.

Medicaid enrollees typically have little to no cost-sharing. However, due to the low incomes of Medicaid enrollees, any amount of cost-sharing for COVID-19 treatment may pose affordability challenges. The FFCRA requires states to cover testing and treatment for Medicaid enrollees without cost sharing as one of the conditions to access a temporary 6.2 percentage point increase to the federal match rate for Medicaid.  The FMAP increase is in place for the duration of the public health emergency.2

Uninsured people needing treatment for COVID-19 may be able to access free services; if not, they could be subject to thousands of dollars in costs. While Congress did not allocate any money specifically for COVID-19 treatment or coverage for the uninsured, the Trump Administration has set aside an unspecified portion of the funding for hospitals and other providers (known as the Relief Fund) included in the CARES Act for this purpose.  Hospitals and other providers may apply to this fund to be reimbursed for care they provide to uninsured patients, subject to availability of funding.  Hospitals and other providers can also decide on a case-by-case basis whether to bill patients or seek reimbursement from the Relief Fund. If providers submit claims for reimbursement from the Relief Fund, they are prohibited from billing uninsured patients. Some states have proposals to cover treatment costs for the uninsured through demonstration waivers.  Such a request from Washington State is still under review at CMS.

Table 1: Standards for Cost-Sharing for COVID-19 Testing and Treatment
Testing Treatment
Employer Insurance No cost-sharing (including self-funded plans and HDHPs) Cost-sharing can be applied.  Cost-sharing may be waived depending on the state, insurer, and/or employer. AHIP details specific insurer decisions here.
Individual Market No cost-sharing (this requirement applies to grandfathered plans but does not apply to short-term limited-duration plans) Cost-sharing can be applied.  Cost-sharing may be waived depending on the state and insurer. AHIP details specific insurer decisions here.
Medicare No cost-sharing Cost-sharing can apply in both traditional Medicare and Medicare Advantage plans.

In Medicare Advantage, depends on the insurer. AHIP details specific insurer decisions here.

Medicaid/CHIP No cost-sharing

To be eligible for a 6.2 percentage point increase in the regular Medicaid match rate during the public health emergency period, states must cover COVID-19 testing and treatment costs without cost-sharing

To be eligible for a 6.2 percentage point increase in the regular Medicaid match rate during the public health emergency period, states must cover COVID-19 testing and treatment costs without cost-sharing
Uninsured Patients face full price unless they can find free or reduced-cost test.

States can choose to cover costs through Medicaid with 100% federal financing (including costs for those in short-term limited-duration plans)

New federal program will reimburse providers

Patients face full price unless they can find free or reduced-cost treatment.

Providers can apply to be reimbursed by the federal government (“The Emergency Fund”) for treating uninsured patients, though providers are not required to participate in the program and uninsured consumers are not guaranteed free care;

Trump Administration guidance is not fully clear on whether people with short-term policies would be considered uninsured for purposes of the Emergency Fund

3. How much will patients pay for COVID-19 preventative care, including a possible future vaccine?

While there is currently no approved vaccine to prevent COVID-19, the coronavirus funding package passed on March 6 specified that if a vaccine is developed it should be priced “fairly and reasonably.” If a vaccine for COVID-19 is eventually approved, recommended, and made widely available, it will most likely be covered for nearly all insured people without cost-sharing, under the Affordable Care Act’s requirement that federally-recommended preventative care be covered without cost-sharing for anyone enrolled in private insurance, Medicare, or in the Medicaid expansion. Typically, insurers are given at least one year to implement these recommendations, but the CARES Act requires plans to cover any coronavirus-related preventative care without cost-sharing within 15 days of a recommendation from the USPSTF and ACIP.

Under the FFCRA, states must cover a COVID-19 vaccine costs for all Medicaid enrollees without cost sharing to be eligible for the enhanced matching funds available through the public health emergency.  Covering the costs of the vaccine for uninsured individuals has not been addressed.

The CARES Act expedites the process for designating a coronavirus vaccine and testing as federally-recommended preventative care to be covered in private insurance without cost-sharing. This Act also provides for coverage of any eventual coronavirus vaccine under Medicare Part B with no cost-sharing; this applies to beneficiaries in both traditional Medicare and Medicare Advantage plans.

4. What happens when people are unable to afford care?

In a 2019 Kaiser Family Foundation/LA Times Survey, about half of respondents with employer-sponsored insurance said someone in their household skipped or postponed medical care or prescription drugs in the past year because of the cost. Seventeen percent say they had to make what they feel are difficult sacrifices in order to pay health care or insurance costs.

Those with higher deductibles were more likely to delay or avoid seeking care due to cost, in many cases because they did not have enough in savings to afford their deductible amount. Among those in the plans with the highest deductibles (at least $3,000 for an individual or $5,000 for a family), over half said the amount of savings they could easily access in the short term is less than the amount of their deductible.

There are significant disparities in savings across the income spectrum, where, for example, 63% of multi-person households with incomes of 400% of poverty or more could pay $12,000 from liquid assets for cost-sharing in 2016, compared with only 18% of households with incomes between 150% and 400% of poverty, and 4% of households with incomes below 150% of poverty. Half of multi-person households with incomes between 150% and 400% of poverty had less than $3,000 in liquid assets in 2016, which means that any significant illness could wipe out all their savings just to meet deductibles and other cost-sharing.

People who are uninsured face even greater cost barriers to seeking needed medical care. Many uninsured individuals worry about being able to pay medical bills if they get sick, and forgo or delay seeking care as a result. They are more likely than those with private insurance to have problems paying medical bills and are also more likely to face negative consequences due to medical bills, such as using up savings, having difficulty paying for necessities, borrowing money, or having medical bills sent to collection.

5. How might job losses and a possible recession affect health coverage and COVID-19 treatment?

Nearly 60% of non-elderly Americans get their health coverage through their employer. Thus, the current economic downturn due to the coronavirus pandemic is not only causing millions of people to lose their job, but also potentially leaving them without insurance at a time when health coverage is especially critical. A KFF analysis estimates that, as of May 2, nearly 27 million people could potentially lose employer-sponsored insurance and become uninsured following job loss.

These newly uninsured people often still have coverage options available to them, including temporarily keeping their employer plan through the Consolidated Omnibus Budget Reconciliation Act (COBRA). With COBRA, coverage is truly continuous, including any costs that have already contributed to the deductible, and enrollees maintain continued access to the same provider network. However, COBRA coverage is very expensive. It generally requires paying the plan’s total costs (both the employer’s and employee’s contributions), which averages $20,576 per year for a family or $7,188 per year for a single individual.

Many newly unemployed individuals will also have options for subsidized coverage. KFF estimates that, of the 27 million people who become uninsured after job loss as of May 2020, nearly half (12.7 million) are eligible for Medicaid, and an additional 8.4 million are eligible for marketplace subsidies. People who lose their job-based coverage can qualify for a 60-day special enrollment period to enroll in ACA Marketplace coverage regardless of which state they reside. Additionally, twelve states (including D.C.) temporarily re-opened their ACA Marketplaces for all enrollees, whether they have had a recent change in their coverage status or not; these special enrollment periods are temporary and most will likely end by June. The Centers for Medicare and Medicaid Services has so far said it will not re-open ACA Open Enrollment in the 38 states that rely on Healthcare.gov to enroll people in the ACA exchanges, but people living in those states who lose their coverage still qualify for a special enrollment period. The reduction in income triggered by unemployment means that many who are eligible to enroll in Marketplace coverage may also be eligible for subsidies, including cost-sharing subsidies that can substantially reduce deductibles.

The CARES Act provides for a temporary federal supplement of $600 per week to state unemployment insurance benefits for individuals.  This supplement expires July 31, 2020 and it will not be considered in determining eligibility for Medicaid and CHIP, but will be considered in determining eligibility for Marketplace subsidies.  For some very-low-wage workers who previously earned too little to qualify for Marketplace subsidies (those in the so-called coverage gap), this supplement may temporarily increase income, making them newly eligible for Marketplace subsidies.

The economic downturn resulting from the COVID-19 pandemic is also leading to job loss among older adults who are eligible for Medicare. People who are age-eligible for Medicare (age 65 or older) can defer enrolling in Medicare Part A and Part B if they have qualified group coverage through their current employer or a spouse’s employer (group coverage qualifies if offered through an employer with 20 or more employees). If people age 65 or older have deferred enrollment in Medicare and lose access to employment-based coverage as a result of their or a spouse’s job loss, there is an eight-month Special Enrollment Period (SEP) to enroll in Medicare after employment (and/or group coverage) ends to avoid facing a penalty for late enrollment. Lifetime late enrollment penalties apply for both Part B (physician coverage) and Part D (prescription drug coverage).

Due to the economic crisis related to COVID-19, more people are likely to qualify and enroll in Medicaid. In states that adopted the Medicaid expansion, adults (both parents and childless adults) with incomes up to 138% FPL could be eligible for Medicaid. In states that have not adopted the expansion, eligibility for parents is typically well below poverty and childless adults are not eligible for coverage (except in Wisconsin). Children in unemployed families will likely be newly eligible for Medicaid or the Children’s Health Insurance Program (CHIP), which is open to children with family income at or well above 200% of FPL in nearly all states.

Unlike coverage in the Marketplace, there is no open-enrollment period for Medicaid, so individuals can apply at any time. In addition, eligibility is based on current monthly income. State unemployment benefits are counted as income for Medicaid eligibility, but new federal supplemental unemployment benefits are excluded from income for purposes of determining Medicaid eligibility (but counted in determining eligibility for tax credits in the Marketplace).