The early years of the Affordable Care Act (ACA) exchanges and broader ACA-compliant individual market were marked by volatility. Markets in some parts of the country have remained fragile, with little competition, an insufficient number of healthy enrollees to balance those who are sick, and high premiums as a result. By 2017, however, the individual market generally had begun to stabilize, and by 2018 insurers in the ACA-compliant market were highly profitable, despite the elimination of cost-sharing subsidy payments and expansion of short-term plans. However, 2019 was the first year that the repeal of the individual mandate penalty went into effect, raising concerns that healthy enrollees would forgo coverage, leaving sicker and more expensive enrollees behind and requiring insurers to increase premiums. Nonetheless, Marketplace premiums fell slightly on average going into 2019, as it became clear that some insurers had raised 2018 rates more than was necessary (and premiums dropped again heading into 2020).

In this brief, we analyze data from 2011 through 2019 to examine how the individual insurance market performed under the ACA and, most recently, without the individual mandate in place. We use financial data reported by insurance companies to the National Association of Insurance Commissioners and compiled by Mark Farrah Associates to look at the average premiums, claims, medical loss ratios, gross margins, and enrollee utilization in the individual insurance market, as well as the amount of medical loss ratio rebates insurers expect to issue to 2019 enrollees. These figures include coverage purchased through the ACA’s exchange marketplaces and ACA-compliant plans purchased directly from insurers outside the marketplaces (which are part of the same risk pool), as well as individual plans originally purchased before the ACA went into effect.

We find that, on average, individual market insurers remained profitable through 2019. Further, despite the absence of the mandate penalty, data indicate that the individual market has not become significantly less healthy. These new data from 2019 offer further evidence that the individual market is stable even without a mandate penalty, though several factors – notably the coronavirus pandemic, economic downturn, and ongoing lawsuit seeking to strike down the ACA – cloud expectations somewhat for the future.

Medical Loss Ratios

As we found in our previous analysis, insurer financial performance as measured by loss ratios (the share of health premiums paid out as claims) worsened in the earliest years of the ACA Marketplaces, but began to improve in recent years. This is to be expected, as the market had just undergone significant regulatory changes in 2014 and insurers had very little information to work with in setting their premiums.

The chart below shows simple loss ratios, which differ from the formula used in the ACA’s MLR provision.¹  Loss ratios began to decline in 2016, suggesting improved financial performance. In 2017, following relatively large premium increases, individual market insurers saw significant improvement in loss ratios, a sign that individual market insurers on average were beginning to better match premium revenues to claims costs. Loss ratios continued to decline in 2018, averaging 70%, suggesting that insurers were able to build in the loss of cost-sharing subsidy payments when setting premiums and some insurers over-corrected. With such low ratios, insurers could not justify premium hikes for 2019, and loss ratios rebounded to average 79% in 2019.

Margins

Another way to look at individual market financial performance is to examine average gross margins per member per month, or the average amount by which premium income exceeds claims costs per enrollee in a given month. Gross margins are an indicator of performance, but positive margins do not necessarily translate into profitability since they do not account for administrative expenses.

Gross margins show a similar pattern to loss ratios. Insurer financial performance improved dramatically through 2018 (increasing to $167 per enrollee, from a recent annual low of -$9 in 2015). Margins fell an average of $44 per member per month from 2018 to 2019, but they remain higher than all other years before 2018. These data suggest that insurers in this market remain financially healthy, on average.

Underlying Trends

Premiums per enrollee rose slightly in 2019 following steep increases in 2018, while per person claims continued to grow modestly. On average, per member per month premiums grew 4% from 2018 to 2019, and per person claims grew 17%.² 

One concern about the elimination of the individual mandate penalty was whether healthy enrollees would drop out of the market in large numbers. However, the average number of days individual market enrollees spent in a hospital in 2019 was slightly lower than inpatient days in the previous four years.³ 

Taken together, these data on claims and utilization suggest that the individual market risk pool is relatively stable, though sicker on average than the pre-ACA market, which is to be expected since people with pre-existing conditions have guaranteed access to coverage under the ACA. Despite concerns that healthier enrollees may be dropping out of the market in recent years, somewhat lower average inpatient days indicate that the individual market did not get sicker, on average, during 2019.

Discussion

Annual results from 2019 suggest that despite the reduction of the individual mandate penalty to $0 the individual insurance market has remained stable. Insurer financial results from 2019 – the first year the repeal of the individual mandate penalty went into effect – reveal yet another favorable year for insurers in the ACA-compliant market. The repeal of the individual mandate penalty and expansion of short-term plans does not appear to have led to a significantly sicker group of enrollees, as hospitalization rates remain stable.

Our recent analysis also finds that individual market insurers expect to pay a record total of nearly $2 billion in rebates to consumers for falling below the ACA medical loss ratio threshold, which requires insurers to spend at least 80% of premium revenues on health care claims or quality improvement activities. This is more than double the amount insurers paid out in rebates last year. In total, across the individual, small group, and large group markets, insurers expect to issue about $2.7 billion in rebates this year based on their 2019 performance, nearly double last year’s previous record high of $1.4 billion.

While markets in some parts of the country have limited insurer participation and high premiums, the individual market on average remains profitable. In the last two years, some insurers have entered the market and others have expanded their footprints, as would be expected in a competitive marketplace. With a continuing legal battle threatening the exchange markets and the ACA as a whole, significant uncertainties remain. While insurers are now locked in to 2020 premiums for ACA-compliant plans, it remains to be seen how continued uncertainty around the coronavirus pandemic, the economic crisis, and the future of the ACA may affect premiums and plan participation in 2021 or beyond.

We analyzed insurer-reported financial data from Health Coverage Portal TM, a market database maintained by Mark Farrah Associates, which includes information from the National Association of Insurance Commissioners. The dataset analyzed in this report does not include NAIC plans licensed as life insurance or California HMOs regulated by California’s Department of Managed Health Care; in total, the plans in this dataset represent at least 80% of the individual market. All figures in this issue brief are for the individual health insurance market as a whole, which includes major medical insurance plans and mini-med plans sold both on and off exchange. We excluded some plans that filed negative enrollment, premiums, or claims and corrected for plans that did not file “member months” in the annual statement but did file current year membership.

To calculate the weighted average loss ratio across the individual market, we divided the market-wide sum of total incurred claims by the sum of all unadjusted health premiums earned. Medical loss ratios in this analysis are simple loss ratios and do not adjust for quality improvement expenses, taxes, or risk program payments. Gross margins were calculated by subtracting the sum of total incurred claims from the sum of unadjusted health premiums earned and dividing by the total number of member months (average monthly enrollment) in the individual insurance market. Using earned premiums adjusted for taxes and fees to calculate loss ratios and gross margins increases the MLR by 4 percentage points and decreases the gross margin per member by $31 in 2019. On average across all years, using earned premiums adjusted for taxes and fees increases the MLR by 3 percentage points and decreases the gross margin per member by $16.

1. The loss ratios shown in this issue brief differ from the definition of MLR in the ACA, which makes some adjustments for quality improvement and taxes, and do not account for reinsurance, risk corridors, or risk adjustment payments. Reinsurance payments, in particular, helped offset some losses insurers would have otherwise experienced. However, the ACA’s reinsurance program was temporary, ending in 2016, so loss ratio calculations excluding reinsurance payments are a good indicator of financial stability going forward. ↩︎
2. Average premiums per member per month increased in 2019, even while average unsubsidized premiums for the lowest-cost plans in each metal tier went down, because average premiums per member per month reflect changes in the age and geographic distribution of enrollees, changes in plans selected by enrollees, and changes in subsidy amounts. ↩︎
3. Hospital patient days for 2014 are not necessarily representative of the full year because open enrollment was longer that year and a number of exchange enrollees did not begin their coverage until mid-year 2014. ↩︎

The economic consequences of the coronavirus pandemic have led to historic levels of job loss in the United States. Social distancing policies required to address the crisis have led many businesses to cut hours, cease operations, or close altogether. Between March 1^st and May 2^nd, 2020, more than 31 million people had filed for unemployment insurance. Actual loss of jobs and income are likely even higher, as some people may be only marginally employed or may not have filed for benefits. Some of these unemployed workers may go back to work as social distancing curbs are relaxed, though further job loss is also possible if the economic downturn continues or deepens.

In addition to loss of income, job loss carries the risk of loss of health insurance for people who were receiving health coverage as a benefit through their employer. People who lose employer-sponsored insurance (ESI) often can elect to continue it for a period by paying the full premium (called COBRA continuation) or may become eligible for Medicaid or subsidized coverage through the Affordable Care Act (ACA) marketplaces. Over time, as unemployment benefits end, some may fall into the “coverage gap” that exists in states that have not expanded Medicaid under the ACA.

In this analysis, we examine the potential loss of ESI among people in families where someone lost employment between March 1^st, 2020 and May 2^nd, 2020 and estimate their eligibility for ACA coverage, including Medicaid and marketplace subsidies, as well as private coverage as a dependent (see detailed Methods at the end of this brief). To illustrate eligibility as their state and federal unemployment insurance (UI) benefits cease, we show eligibility for this population as of May 2020 and January 2021, when most will have exhausted their UI benefits.

What are coverage options for people losing ESI?

Eligibility for health coverage for people who lose ESI depends on many factors, including income while working and family income while unemployed, state of residence, and family status. Some people may be ineligible for coverage options, and others may be eligible but opt not to enroll. Some employers may temporarily continue coverage after job loss (for example, through the end of the month), but such extensions of coverage are typically limited to short periods.

Medicaid: Some people who lose their jobs and health coverage—especially those who live in states that expanded Medicaid under the ACA— may become newly eligible¹  for Medicaid if their income falls below state eligibility limits (138% of poverty in states that expanded under the ACA). For Medicaid eligibility, income is calculated based on other income in the family plus any state unemployment benefit received (though the $600 per week federal supplemental payment available through the end of July is excluded). Income is determined on a current basis, so prior wages for workers recently unemployed are not relevant. In states that have not expanded Medicaid under the ACA, eligibility is generally limited to parents with very low incomes (typically below 50% of poverty and in some states quite a bit less); thus many adults may fall into the “coverage gap” that exists for those with incomes above Medicaid limits but below poverty (which is the minimum eligibility threshold for marketplace subsidies under the ACA). Undocumented immigrants are ineligible for Medicaid, and recent immigrants (those here for fewer than five years) are ineligible in most cases.

Marketplace: ACA marketplace coverage is available to legal residents who are not eligible for Medicaid and do not have an affordable offer of ESI; subsidies for marketplace coverage are available to people with family income between 100% and 400% of poverty. Some people who lose ESI may be newly-eligible for income-based subsidies, based on other family income plus any state and new federal unemployment benefit received (including the $600 per week federal supplement, unlike for Medicaid).²  While current income is used for Medicaid eligibility, annual income for the calendar year is used for marketplace subsidy eligibility. Advance subsidies are available based on estimated annual income, but the subsidies are reconciled based on actual income on the tax return filed the following year. People who lose ESI due to job loss qualify for a special enrollment period (SEP) for marketplace coverage.³  As with Medicaid, undocumented immigrants are ineligible for marketplace coverage or subsidies. However, recent immigrants, including those whose income makes them otherwise eligible for Medicaid, can receive marketplace subsidies.

ESI Dependent Coverage: People who lose jobs may be eligible for ESI as a dependent under a spouse or parent’s job-based coverage. Some people may have been covered as a dependent prior to job loss, and some may switch from their own coverage to coverage as a dependent.

COBRA: Many people who lose their job-based insurance can continue that coverage through COBRA, although it is typically quite expensive since unemployed workers generally have to pay the entire premium – employer premiums average $7,188 for a single person and $20,576 for a family of four – plus an additional 2%. People who are eligible for subsidized coverage through Medicaid or the marketplaces are likely to opt for that coverage over COBRA, though COBRA may be the only option available to some people who are income-ineligible for ACA coverage.

Short-term plans: Short-term plans, which can be offered for up to a year and can sometimes be renewed under revised rules from the Trump administration, are also a potential option for people losing their employer-sponsored insurance. These plans generally carry lower premiums than COBRA or ACA-compliant coverage, as they often provide more limited benefits and usually deny coverage to people with pre-existing conditions. Even when coverage is issued, insurers generally may challenge benefit claims that they believe resulted from pre-existing medical problems; given the long latency between initial infection and sickness with COVID-19, these plans are riskier than usual during the current pandemic. People cannot use ACA subsidies toward short-term plan premiums.

Our analysis examines eligibility for Medicaid, marketplace subsidies, and dependent ESI coverage. We do not estimate enrollment in COBRA, short-term plans, or temporary continuation of ESI. See Methods for more details.

How does coverage and eligibility change following job loss?

Between March 1^st, 2020 and May 2^nd, 2020, we estimate that nearly 78 million people lived in a family in which someone lost a job. Most people in these families (61%, or 47.5 million) were covered by ESI prior to job loss. Nearly one in five (17%) had Medicaid, and close to one in ten (9%) were uninsured. The remaining share either had direct purchase (marketplace) coverage (7%) or had other coverage such as Medicare or military coverage (6%) (Figure 1).

We estimate that, as of May 2^nd, 2020, nearly 27 million people could potentially lose ESI and become uninsured following job loss (Figure 1). This total includes people who lost their own ESI and those who lost dependent coverage when a family member lost a job and ESI. Additionally, some people who otherwise would lose ESI are able to retain job-based coverage by switching to a plan offered to a family member: we estimate that 19 million people switch to coverage offered by the employer of a working spouse or parent. A very small number of people who lose ESI (1.6 million) also had another source of coverage at the same time (such as Medicare) and retain that other coverage. These coverage loss estimates are based on our assumptions about who likely filed for UI as of May 2^nd, 2020 and the availability of other ESI options in their family (see Methods for more detail).

Among people who become uninsured after job loss, we estimate that nearly half (12.7 million) are eligible for Medicaid, and an additional 8.4 million are eligible for marketplace subsidies, as of May 2020 (Figure 2). In total, 79% of those losing ESI and becoming uninsured are eligible for publicly-subsidized coverage in May. Approximately 5.7 million people who lose ESI due to job loss are not eligible for subsidized coverage, including almost 150,000 people who fall into the coverage gap, 3.7 million people ineligible due to family income being above eligibility limits, 1.3 million people who we estimate have an affordable offer of ESI through another working family member, and about 530,000 people who do not meet citizenship or immigration requirements. We project that very few people fall into the coverage gap immediately after job loss (as of May 2020) because wages before job loss plus unemployment benefits (including the temporary $600 per week federal supplement added by Congress) push annual income for many unemployed workers in non-expansion states above the poverty level, making them eligibility for ACA marketplace subsidies for the rest of the calendar year.

By January 2021, when UI benefits cease for most people, we estimate that eligibility shifts to nearly 17 million being eligible for Medicaid and about 6 million being eligible for marketplace subsidies (Figure 2), assuming those who are recently unemployed have not found work. Many unemployed workers who are eligible for ACA marketplace subsidies during 2020 would instead be eligible for Medicaid or fall into the coverage gap during 2021. The number in the coverage gap grows to 1.9 million (an increase of more than 80% of its previous size), and the number ineligible for coverage due to income shrinks to 0.9 million.

Estimates of coverage loss and eligibility vary by state, depending largely on underlying state employment by industry and Medicaid expansion status. Not surprisingly, states in which the largest number of people are estimated to lose ESI are large states with many people working in affected industries (Appendix Table 1). Eight states (California, Texas, Pennsylvania, New York, Georgia, Florida, Michigan, and Ohio) account for just under half (49%) of all people who lose ESI. Five of the top eight states have expanded Medicaid, and people eligible for Medicaid among the potentially newly uninsured as of May 2020 in these five states account for 40% of all people in that group nationally. Overall, patterns by state Medicaid expansion status show that people in expansion states are much more likely to be eligible for Medicaid, while those in non-expansion states are more likely to qualify for marketplace subsidies (Figure 3). However, the number of people qualifying for marketplace subsidies is similar across the two sets of states, as more people live in expansion states. Three states that have not expanded Medicaid, including Texas, Georgia, and Florida, account for 30% of people who become marketplace tax credit eligible nationally in May 2020. Assuming unemployment extends into 2021 when UI benefits would likely expire for most families, the proportion eligible for Medicaid would increase in expansion states while non-expansion states may see more nonelderly adults moving into the Medicaid coverage gap (Figure 4; Appendix Table 2).

Nearly 7 million people losing ESI and becoming uninsured are children, and the vast majority of them are eligible for coverage through Medicaid or CHIP. Within the 26.8 million people losing ESI and becoming uninsured in May 2020, 6.1 million are children. Because Medicaid/CHIP income eligibility limits for children are generally higher than they are for adults, the vast majority of these children are eligible for Medicaid/CHIP in May 2020 (5.5 million, or 89%) or January 2021 (5.8 million, or 95%).

Discussion

Given the health risks facing all Americans right now, access to health coverage after loss of employment provides important protection against catastrophic health costs and facilitates access to needed care. Unemployment Insurance filings continue to climb each week, and it is likely that people will continue to lose employment and accompanying ESI for some time, though some of them will return to work as social distancing curbs are loosened. The ACA expanded coverage options available to people, and we estimate that the vast majority of people who lose ESI due to job loss will be eligible for ACA assistance either through Medicaid or subsidized marketplace coverage. However, some people will fall outside the reach of the ACA, particularly in January 2021 when UI benefits cease for many and some adults fall into the Medicaid coverage gap due to state decisions not to expand coverage under the ACA.

Both ACA marketplace subsidies and Medicaid are counter-cyclical programs, expanding during economic downturns as people’s incomes fall. In return for additional federal funding to help states finance their share of Medicaid cost during the public health crisis, states must maintain eligibility standards and procedures that were in effect on January 1, 2020 and must provide continuous eligibility through the end of the public health emergency, among other requirements. These provisions may help eligible individuals enroll in and maintain Medicaid, particularly in light of state and federal actions prior to the crisis to increase eligibility verification requirements or transition people off Medicaid.

Our estimates only examine eligibility among people who lost ESI due to job loss and potentially became uninsured. Additional uninsured individuals—including some of the 9% of the 78 million individuals in families where someone lost employment—may also be eligible for Medicaid or subsidized coverage. It is possible that contact with state UI systems may lead them to seek and enroll in coverage, even if they were eligible for financial assistance before job loss but uninsured.

It is unclear whether people losing ESI and becoming uninsured will enroll in new coverage. We did not estimate take-up or enrollment in coverage options but rather only looked at eligibility for coverage. Even before the coronavirus crisis, there were millions of people eligible for Medicaid or marketplace subsidies who were uninsured. Eligible people may not know about coverage options and may not seek coverage; others may apply for coverage but face challenges in navigating the application and enrollment process. Still others may find marketplace coverage, in particular, unaffordable even with subsidies. As policymakers consider additional efforts to aid people, expanding outreach and enrollment assistance, which have been reduced dramatically by the Trump Administration, could help people maintain coverage as they lose jobs.

This is the first economic downturn during which the ACA will be in place as a safety net for people losing their jobs and health insurance. The Trump Administration is arguing in case before the Supreme Court that the ACA should be overturned; a decision is expected by next Spring. The ACA has gaps, and for many the coverage may be unaffordable. However, without it, many more people would likely end up uninsured as the U.S. heads into a recession.

1. Medicaid already covers many workers, and Medicaid beneficiaries who lose their jobs and income will retain their Medicaid coverage, as there is no lower floor on income eligibility for Medicaid. ↩︎
2. Notably, eligibility for marketplace subsidies (but not Medicaid) includes the new federal supplemental unemployment insurance benefits recently enacted by Congress for people affected by COVID-19. This supplemental benefit could lead some unemployed low-wage workers who previously were in the “coverage gap” (income below poverty but above state Medicaid limits) to have income above poverty, making them newly eligible for Marketplace subsidies. ↩︎
3. People who were uninsured while working may be able to enroll in marketplace coverage if they live in a state with a state-run marketplace, most of which have re-opened enrollment to allow residents to obtain marketplace coverage if eligible. However, people who were uninsured while working and live in one of the 32 states that use the federal marketplace do not qualify for a “special enrollment period” to enroll in coverage through the federal marketplace. ↩︎

Background

About 153 million Americans rely on employer-sponsored health insurance.¹  The specific benefits and services covered by those plans are shaped by many factors including costs, employer policies and beliefs, as well as state and federal regulations. A recent increase in legislative efforts at the state level to limit coverage of abortion, including in private insurance plans, could leave more women without coverage for abortion. This gap in plan benefits could have considerable financial consequences for women seeking abortion services, particularly for those who are low-income.

In addition, there are discussions in Congress about including funds in the next Coronavirus relief package to subsidize COBRA premiums for workers who lost their jobs during the COVID-19 pandemic. One of the sticking points of the debates has been whether or not the legislation will include a stipulation that federal funds cannot be used to pay for abortion coverage in employer plans, which could have implications for coverage of abortion in employer plans and the logistics of a COBRA subsidy.

This issue brief presents data from the 2019 KFF Employer Health Benefits Survey on the share of covered workers who are employed by firms that have asked their insurer or third party administrator to exclude coverage for abortion from their health plan.

State Regulation of Abortion Coverage in Private Plans

Eleven states ban state-regulated private plans from including abortion coverage; most – but not all – have exceptions for pregnancies resulting from rape or incest or in cases in which it poses a threat to the life of the pregnant woman. Conversely, a handful of states have enacted policies that require coverage of abortion services in state-regulated private plans (Figure 1). However, neither the state-level abortion coverage inclusion or prohibition requirements apply to self-funded plans sponsored by private employers, which are exempt from most state insurance laws. Self-funding is common among larger employers. In total, about three out of five covered workers (59%) at private-sector firms are enrolled in a self-funded plan.² 

In all states (except those where abortion coverage is mandatory for fully-insured plans), employers may choose not to offer coverage for abortion, or only to cover it under limited circumstances such as in cases of rape or incest or life endangerment of the pregnant person (much like the federal law under the Hyde Amendment).

The lack of abortion coverage means that women must directly bear the full cost of the abortion. The cost of an abortion varies by the type of procedure, the location of the provider, and how far along in pregnancy it is performed. One study found that in 2011 and 2012, the average charge was $558 for a surgical abortion and $527 for a medication abortion at 10 weeks gestation. Abortions later in pregnancy can cost thousands of dollars. These costs can make abortion prohibitive for many people. According to a 2017 KFF poll, about one-third of individuals with employer-sponsored insurance (34%) would not be able to pay an unexpected medical bill of $500.

Employer Health Benefits Survey

KFF conducted the annual Employer Health Benefits Survey between January and July of 2019. It included 2,012 randomly-selected, non-federal public and private firms with three or more employes. The 2019 survey asked firms that offer health insurance: “Has your firm asked your insurer or TPA³  [third party administrator] to exclude abortion coverage from your health plan?” For more information on the survey methodology, see the Survey Design and Methods section.

At the firm level, 3% of firms that offer health benefits exclude coverage of abortion in at least some circumstances from their plan. While there are more than three million firms in the United States, most covered workers are employed by a relatively small number of firms.⁴  At the worker level, 10% of covered workers work at a firm that excludes coverage for abortion under some or all circumstances. This includes 4% of covered workers at firms that exclude coverage of abortion under any circumstance and 6% of covered workers at firms that exclude coverage of abortion except under some limited circumstances (which may include life endangerment, rape, or incest). It is important to note that although an employer may not have excluded abortion coverage, the plan may still not cover it. This is likely the case in states that ban abortion coverage in state-regulated plans.

Exclusion of abortion coverage varies by firm size (Figure 2). Covered workers at the largest firms (5,000 or more workers) are more likely (17%) than those at smaller firms to work at a firm that excludes coverage for abortion in at least some circumstances. Only 3% of small firms (3-199 workers) and 5% of moderately sized firms (200-999 workers) specifically requested any exclusion of abortion coverage from their plan.

Exclusion of abortion coverage also varies by other firm characteristics such as ownership structure, plan funding, and firm wage level (Figure 3). Covered workers at private-not-for-profit firms (18%) are more likely than those at private for-profit firms (6%) to work at a firm that excludes coverage for abortion under some or all circumstances. Private not-for-profit firms include many large health care and educational institutions that have religious affiliations, some of which are opposed to abortion and limit insurance coverage of it in their health plans. There were approximately 1.56 million non-profits registered with the IRS⁵  in 2015, but they do not collect uniform information on whether non-profits are religiously-affiliated. Thirteen percent of covered workers at public employers, such as state and local governments, restrict abortion coverage in at least some circumstances. In 2019, 20 states had bans on inclusion of abortion in their public employee insurance plans except in limited circumstances; two states had bans on abortion coverage under all circumstances. While not included in the survey, health plans for federal employees follow the Hyde Amendment rule that excludes coverage of abortion except in cases of rape, incest, or life endangerment.

Covered workers at firms with a completely or partially self-funded plan (14%) are more likely than those at firms with a fully-insured plan (3%) to work at firm that excludes abortion coverage under at least some circumstances. Self-funded plans established by private employers (but not public employers) are exempt from most state insurance laws, including reserve requirements, mandated benefits, premium taxes, and many consumer protection regulations. Self-funding is common among larger firms because they can spread the risk of costly claims over a large number of workers and dependents. The survey did not ask the specific reason(s) the firm chose to self-fund their plan.

Discussion

Employer-sponsored health insurance is the primary source of health benefits in the U.S., covering 153 million Americans. Ten percent of covered workers are employed at a firm that has asked to exclude abortion from their health plan in least some circumstances. This percentage does not include the more than 20 million federal employees, veterans, military personnel, and dependents whose health plans contain the Hyde amendment rule excluding coverage for abortion except in limited circumstances. It also does not include private sector employees (and their dependents) whose employer did not ask for an exclusion but that reside in a state that bans abortion coverage in state-regulated plans.

Additionally, plans that do cover abortion may have restrictions on the situations in which they will pay for it, including limits on gestational age, number of abortions covered, or the method of abortion. This has been the case in individual plans that are available in some of the ACA Marketplaces in states that have not fully banned abortion coverage in private plans.

It is important to note that the survey did not ask if the firm’s plan includes abortion coverage. When this question was asked in prior years, a sizeable share of employers did not know whether their plan included coverage for abortion. In light of the extensive job loss resulting from the coronavirus pandemic, Congress is considering legislation to subsidize COBRA premiums to help unemployed and furloughed people afford to remain on their employer’s health insurance. Media reports have noted that there is bipartisan support for the subsidies, but disagreement over whether there should be a ban on subsidies that pay for abortion coverage in plans, citing the Hyde Amendment ban on federal funding of abortion. Uncertainty over whether or not an employer plan covers abortion could pose logistical challenges to the implementation of this legislation should it restrict or limit funds to health plans that include abortion coverage.

Employer-sponsored health insurance is the primary source of coverage for millions of workers in the U.S. Gaps in coverage of services effectively means that workers and their families may be required to bear the cost of that medical care. For the many workers and dependents who lack abortion coverage, these costs can translate into hundreds or thousands of dollars out-of-pocket for abortion services, placing a financial barrier to this service, particularly for low-wage workers.

1. Kaiser Family Foundation. The Uninsured and the ACA: A Primer: Supplemental Tables. 2019 Jan (cited 2020 Jan). See Table 1: 267.5 million nonelderly people, 57.1% of whom are covered by employer-sponsored insurance. ↩︎
2. This estimate excludes state and local government employees. While federal law (the Employee Retirement Income Security Act of 1974, or ERISA) generally exempts self-funded plans from state insurance regulations, states do have jurisdiction over the plans offered to state and local employees. ↩︎
3. A TPA is an administrator or insurer that provides administrative services such as claims management, commonly for self-funded plans. ↩︎
4. See Figure M.6 of the Survey Design and Methods section of the 2019 KFF Employer Health Benefits Survey. ↩︎
5. Some of the non-profits registered with the IRS have fewer than three employees. Only firms with at least three employees are included in the KFF Employer Health Benefits Survey. ↩︎

Introduction

As clinicians seek new ways to serve patients and stem the rapid spread of the novel coronavirus in the United States, policymakers and insurers have looked to telemedicine or telehealth to provide care to patients in their homes. At a time when many people in the U.S. are under shelter in place orders, this approach to care allows patients to maintain social distancing, reduce their risk of exposure to the novel coronavirus and potentially avoid overburdening emergency departments and urgent care centers at this time. After many years of slow growth, telemedicine use has exploded across the nation in a few short weeks. The telemedicine landscape is complex, with many moving pieces as different players respond to COVID-19. The federal government has taken actions to broaden and facilitate the use of telemedicine, particularly though Medicare. States, health systems, and insurance carriers have also moved with unprecedented speed to shift many visits that were previously done in person to a telemedicine platform.  This brief presents some of the many policy changes that have taken place in the field of telehealth by the federal government, state governments, commercial insurers and health systems in just the few short weeks since the COVID-19 outbreak hit the U.S. We highlight key considerations in achieving widespread implementation of telemedicine services during this pandemic and beyond, including easing of telemedicine regulations, broadening insurance coverage, strengthening telecommunications infrastructure, and patient facing issues like connectivity and quality of care.

What is telemedicine?

While varied definitions for telemedicine or telehealth exist, it is commonly defined as the remote provision of health care services using technology to exchange information for the diagnosis, treatment and prevention of disease. Telemedicine is usually defined narrowly by insurers to include technologies like live videoconference and remote patient monitoring, while telehealth is often defined more broadly, to include basic telecommunication tools, as simple as phone calls, text messages, emails, or more sophisticated online health portals that allow patients to communicate with their providers. However, telehealth and telemedicine are often used interchangeably.

Telemedicine can enable providers to deliver health services to patients at remote locations, by conducting “virtual visits” via videoconference or phone (Figure 1). During a telemedicine visit, a patient may see providers from their usual source of care, like Stanford Health, Kaiser Permanente, or Mount Sinai, or they may interact with providers employed by a stand-alone telemedicine platform like Amwell or Virtuwell. Telemedicine can also enable remote interactions and consultations between providers.

How widespread was telemedicine use before COVID-19?

Before the onset of the COVID-19 pandemic, utilization of telemedicine in the U.S. was minimal. Telemedicine growth has been limited by lack of uniform coverage policies across insurers and states, and hurdles to establishing telemedicine in health systems (e.g. high startup costs, workflow reconfiguration, clinician buy-in, patient interest). The Peterson-KFF Health System Tracker analyzed a sample of health benefit claims from the IBM MarketScan Commercial Claims and Encounters Database; among enrollees in large employer health plans with an outpatient service, 2.4% had utilized at least one telehealth service in 2018 (up from 0.8% in 2016). Similarly, utilization of telemedicine by traditional Medicare and Medicaid and beneficiaries enrolled in managed care plans had been trending upward, but remained low.

How is telemedicine being used during the COVID-19 pandemic?

During the COVID-19 pandemic, there are multiple scenarios in which patients and providers are utilizing telemedicine to enable remote evaluations between a patient and a provider, while respecting social distancing. (Figure 2).  Use of “virtual visits” via phone or videoconference can address non-urgent care or routine management of medical or psychiatric conditions, while online or app-based questionnaires can facilitate COVID-19 screening to determine the need for in-person care.

Many hospitals have instructed patients with suspected coronavirus symptoms or exposure to call their doctors or turn to telemedicine first, before showing up to the emergency room or urgent care visit. The Cleveland Clinic, University of Washington (UW), NYU Langone, Oregon Health Sciences University (OHSU), Intermountain Health Care, Medical University of South Carolina (MUSC), and Rush University Medical Center are all advising patients with suspected coronavirus to start by using a virtual visit or online screening, rather than presenting to an emergency room for testing. This is in line with the Centers for Disease Control and Prevention (CDC) encouragement that those who are mildly ill should call their doctors before seeking in-person care. For patients who are having more severe symptoms (e.g. difficulty breathing) or with complex comorbidities, evaluation from their home via telemedicine may not be appropriate, as in-person care intervention may be needed.

What measures have been taken so far to expand telehealth access in the U.S.?

In response to the novel coronavirus, demand for telemedicine is rapidly increasing. Telemedicine, what was once a niche model of health care delivery, is now breaking into the mainstream in response to the COVID-19 crisis. In China, telemedicine platform JD Health saw a tenfold increase in their services during the outbreak and is now providing nearly 2 million online visits per month. In the U.S., existing telemedicine platforms like Amwell and UPMC’s virtual urgent care have reported rapid increases in their utilization. A recent poll found 23% of adults have used telehealth services in light of the COVID-19 pandemic.

There are a myriad of telemedicine laws and regulations determine who can deliver which telemedicine services to whom, in what location, in what fashion, and how they will be reimbursed. The federal government regulates reimbursement and coverage of telemedicine for Medicare and self-insured plans, while Medicaid and fully-insured private plans are largely regulated on a state-by-state basis (Figure 3). This complexity in the regulatory framework for telemedicine creates challenges for patients in knowing what services are covered, and for providers in knowing what regulations to abide by.

As the COVID-19 pandemic evolves, so too are the emergency policies regarding telemedicine. The federal government, some states, and some health insurance carriers are trying to enable more telemedicine visits to be permitted and paid for. It is important to note that even when the federal government announces loosening of telemedicine restrictions that states have their own regulations and laws that shape coverage in state-regulated (fully insured) insurance plans and Medicaid. And even when regulations are temporarily lifted to facilitate telemedicine, health systems and patients will have their own challenges in implementing and accessing these services. While many of the telemedicine regulations have been temporarily relaxed, for telemedicine to be more broadly accessible to patients in the U.S. over the long term, several actions would need to happen (Figure 4). Next, we outline what changes have been made to telehealth policy and implementation by the federal government, state governments, commercial insurers and health systems in response to the COVID-19 emergency, as well as what gaps remain.

Federal Changes to Telehealth Policy

The federal government dictates several facets of telehealth policy, including nationwide patient privacy laws (e.g. HIPAA), federal prescribing laws for controlled substances, grant funding for telehealth initiatives and Medicare coverage of telehealth. In response to the COVID-19 emergency to make telemedicine more widely available, the federal government has taken action in all these domains.

HIPAA

Typically telemedicine platforms are required to comply with regulations under the Health Insurance Portability and Accountability Act (HIPAA), which health organizations and providers must follow to protect patient privacy and health information. However, on March 17, 2020 the U.S. Department of Health and Human Services (HHS) issued an announcement stating that, “Effective immediately… [HHS] will exercise enforcement discretion and will waive potential penalties for HIPAA violations against health care providers that serve patients in good faith through everyday communications technologies during the COVID-19 nationwide public health emergency.” This now allows widely accessible services like FaceTime or Skype to be used to telemedicine purposes, even if the service is not related to COVID-19. Potential concerns to this approach include the possibility that protected health information (PHI) that is discussed or sent over a non-HIPAA compliant platform may be accessed, shared or even sold by these platforms. The National Consortium of Telehealth Resource Centers (NCTRC) currently urges health centers to sign a Business Associate Agreement (BAA) with their chosen platform, to agree that the data exchanged are safeguarded.  In addition to HIPAA, many states have their own laws and regulations to protect patient health information. Loosening enforcement of HIPAA will likely not impact state level regulations, meaning states would need to lift or loosen their own health information laws. Some states (e.g. CA, ME, MD, NM, ND, UT) have issued guidance to relax state-specific privacy standards for telehealth during the state of emergency.

Federal oversight of Controlled substances

Under the Controlled Substances Act, the Drug Enforcement Agency (DEA) normally requires an in-person evaluation before a provider can prescribe a controlled substance, limiting telemedicine’s use for e-prescribing of controlled substances without a prior in-person patient-provider relationship. However, during a state of national emergency, there are exceptions to this rule. For the duration of the COVID-19 public health emergency, DEA-registered providers can now use telemedicine to issue prescriptions for controlled substances to patients without an in-person evaluation, if they meet certain conditions. One of these conditions is that provider must still comply with state laws; many states have their own laws regulating telemedicine and controlled substances, which federal changes would not affect.

Medicare

Changes to Traditional Medicare: Based on new waiver authority included in the Coronavirus Preparedness and Response Supplemental Appropriations Act (and amended by the CARES Act), the HHS Secretary has waived certain restrictions on Medicare coverage of telehealth services for traditional fee-for-service (FFS) Medicare beneficiaries during the coronavirus public health emergency (first issued on January 31, 2020, and renewed on April 21, 2020). The waiver does the following: lifts the requirement that beneficiaries must live in rural areas in order to receive telehealth services, meaning beneficiaries in any geographic area could receive telehealth services; allows the patient’s home to qualify as an “originating site” from which they can access telehealth visits; allows telehealth visits to be delivered via smartphone with real-time audio/video interactive capabilities in lieu of other equipment; and removes the requirement that providers of telehealth services have treated the beneficiary in the last three years. A separate provision in the CARES Act allows federally qualified health centers (FQHCs) and rural health clinics (RHCs) to serve as “distant site” providers, and provide telehealth services to Medicare beneficiaries during the COVID-19 emergency period (Figure 5).

CMS has also expanded access to the types of services that made be provided via audio-only telephones. In a March 2020 Interim Final Rule, CMS stated that it would allow providers to “evaluate beneficiaries who have audio phones only.” In a subsequent announcement, CMS broadened this to include behavioral health services and patient education services, but still not the full range of telehealth services that can be provided using two-way audio-video connection. This limits telehealth’s reach for Medicare beneficiaries without access to smartphones or other video communications. Other modifications to telehealth availability in response to the COVID-19 emergency include allowing both home health agencies and hospice providers to provide some services via telehealth, and allowing certain required face-to-face visits between providers and home dialysis and hospice patients to be conducted via telehealth. Additionally, CMS is temporarily waiving the Medicare requirement that providers be licensed in the state they are delivering telemedicine services when practicing across state lines, if a list of conditions are met. This change however, does not exempt providers from state licensure requirements (see section below on state licensing actions). Medicare is also temporarily expanding the types of providers who may provide telehealth services.

Importantly, these expanded telehealth services under Medicare are not limited to COVID-19 related services, rather they are available to patients regardless of diagnosis and can be used for regular office visits, mental health counseling, and preventive health screenings. Separate from the time-limited expanded availability of telehealth visits, traditional Medicare also covers brief, “virtual check-ins” via telephone or captured video image, and E-visits, for all beneficiaries. These visits are more limited in scope than a full telehealth visit.

Medicare covers all types of telehealth services under Part B, so beneficiaries in traditional Medicare who use these benefits are subject to the Part B deductible of $198 in 2020 and 20 percent coinsurance, although many beneficiaries have some source of supplemental coverage that helps pay their share of costs. However, the HHS Office of Inspector General is providing flexibility for providers to reduce or waive cost sharing for telehealth visits during the COVID-19 public health emergency.

Changes to Medicare Advantage: Medicare Advantage plans have been able to offer additional telehealth benefits not covered by traditional Medicare and have flexibility to waive certain requirements with regard to coverage and cost sharing in cases of disaster or emergency, such as the COVID-19 outbreak. In response to COVID-19, CMS has advised plans that they may waive or reduce cost sharing for telehealth services, as long as plans do this uniformly for all similarly situated enrollees.  This guidance, however, is voluntary and plans will vary in their responses to this new flexibility.

Federal Funding for telehealth

The newly passed Coronavirus Aid, Relief, and Economic Security (CARES) Act includes additional funding to the Telehealth Network Grant Program (TNGP). This program currently awards a total of $8.7 million a year for telehealth technologies used in rural areas and medically underserved areas. The act strikes the current funds, and replaces it with $29 million for five years, starting in 2021. The bill also ends funding for the Telehealth Resource Center (TRC) Grant Program, which is currently funding TRCs at roughly $4.6 million a year for four years, since 2017.

State Changes to Telehealth Policy

A significant portion of telehealth policy is decided by state governments. Each state has its own laws regarding provider licensing, patient consent for telehealth and online prescribing laws. Importantly, states also are in charge of deciding which telehealth services will be covered by their Medicaid program, and most states also have laws governing reimbursement for telemedicine in full-insured private plans. Changes to state level regulations in response to COVID-19 are described next.

Licensing laws

Normally, clinicians must be licensed to practice in states where they offer telemedicine services, and states regulate which health professionals are credentialed to practice in their state. For example, if a clinician is located in California, but is providing services remotely to a patient in Oregon via telemedicine, the provider must be licensed in Oregon, the state where the patient is located. Nine states require special licenses specific to telemedicine. Others participate in “compacts” that allow providers in participating states an expedited process to practice in other compact states. However, to address COVID-19, out of state clinicians may be needed to conduct virtual visits with patients in states with the highest burden of cases. This requires they be licensed to practice across state lines. Almost all states are moving to temporarily waive out of state licensing requirements, so that providers with equivalent licenses in other states can practice via telehealth. The Federation of State Medical Boards is tracking these updates, and finds that currently 49 states have issued waivers regarding licensure requirements during the COVID-19 emergency.

STate Specific Online prescrIbing laws

Most states require a patient-provider relationship be established before e-prescribing of medications. Many telemedicine platforms use an online health questionnaire to establish that relationship, but in at least 15 states, this method is considered inadequate. Instead, a physical exam would be required before prescribing, either in-person, by live-video, or by a referring physician, depending on the state. For patients who are now turning to telemedicine visits rather than their usual source of in-person care, clinicians in some states may face legal barriers to online prescribing medications if they do not already have a pre-existing relationship with the patient. Many states are issuing emergency orders to remove in-person requirements before engaging in telehealth, for the duration of the public health emergency (e.g. AK, AZ, AR, DE, HI, IA, KS, KY, LA, MD, MS, MT, OH, OK, SD).

Consent Laws

Thirty-eight states and DC require providers to obtain and document informed consent from patients before engaging in a telehealth visit. In some states, this applies only to Medicaid beneficiaries, but in others this applies to all telehealth encounters regardless of payor. In most states, verbal consent is allowed, but in a minority of states, consent must be obtained in writing. In response to COVID-19, some state Medicaid programs that would normally require written consent have waived this requirement; for example, providers caring for Medicaid beneficiaries in Alabama, Delaware, Georgia, and Maine can now obtain verbal consent for telemedicine, rather than having the patient sign a written consent form.

Private Insurers and Employer Plans

As of Fall 2019, 41 states and D.C. had laws governing reimbursement for telemedicine services in fully-insured private plans, but private insurer laws enacted by states vary widely. In approximately half of states, if telemedicine services are shown to be medically necessary and meet the same standards of care as in-person services, state-regulated private plans must cover telemedicine services if they would normally cover the service in-person, called “service parity.” However, fewer states require “payment parity,” meaning telemedicine services to be reimbursed at the same rate as equivalent in-person services. CCHP finds only 6 states (CA, DE, GA, HI, MN, NM) that required payment parity prior to COVID-19, while a KFF analysis of telehealth laws suggests an additional 4 states followed payment parity as well (AR, CO, KY, NJ).  In the remaining states, telemedicine is typically reimbursed at lower rates than equivalent in-person care. In response to COVID-19, more and more states are enacting service and payment parity requirements for fully-insured private plans. For example, at least 16 states are requiring payment parity for telehealth during the public health emergency.

In contrast to fully-insured health plans which must comply with both federal and state requirements, self-insured health plans are regulated by the federal government through the Department of Labor. These plans may cover telemedicine, but each plan can choose to cover these services or not. Prior analysis shows that the majority of large employer plans, including those that are self-insured, cover some telemedicine services.

Medicaid

Telehealth Policy Before the COVID-19 Emergency: The use of telehealth in the Medicaid program has grown as states have sought to address barriers to care including insufficient provider supply (especially specialists), transportation barriers, and rural access challenges. Historically, states have had broad flexibility to determine whether to cover telehealth/telemedicine, which services to cover, geographic regions telehealth may be used, and how to reimburse providers for these services. Prior to COVID-19, all states and DC provided some coverage of telehealth in Medicaid FFS but the definition and scope of coverage varied from state to state. The most commonly covered modality of telehealth was live video. Few states permitted “audio-only” telephone care to qualify as a telehealth service. Additionally, only 19 state FFS Medicaid programs allowed patient’s to access telemedicine from their homes (e.g. home was not an eligible “originating site”), limiting telemedicine’s reach for many low income people. Of note, state telehealth policies may differ between Medicaid FFS and managed care, an important distinction given most Medicaid beneficiaries are now in managed care plans. A study of Medicaid claims data showed beneficiaries enrolled in Medicaid managed care plans were more likely than those in FFS programs to use telemedicine.

Policy Changes in Response to COVID-19: In response to the COVID-19 outbreak, CMS issued guidance reiterating states can use existing flexibility to provide coverage for telehealth services: “States have broad flexibility to cover telehealth through Medicaid, including the methods of communication (such as telephonic, video technology commonly available on smart phones and other devices) to use.” They clarify, “No federal approval is needed for state Medicaid programs to reimburse providers for telehealth services in the same manner or at the same rate that states pay for face-to-face services.” The FAQ guidance also discusses how telehealth and telephonic services can be covered for FQHCs and rural health centers (RHCs) and under managed care contracts, if states choose to do so.

Almost all states are issuing emergency policies in response to the COVID-19 outbreak to make telehealth services more widely available in their Medicaid FFS programs and/or through Medicaid managed care plans. Importantly, most states are newly allowing both FFS and managed care Medicaid beneficiaries to access services from their home, and most are directing Medicaid plans to allow for reimbursement for some telephone evaluations. Many states are newly allowing FQHCs and RHCs to serve as distant site providers, and expanding which professions qualify as eligible to provide telehealth services through Medicaid.

States are also using 1915(c) Appendix K waivers to enable the provision of home and community-based services (HCBS) remotely by telehealth for people with disabilities and/or long-term care needs. Using Section 1135 waivers all 50 states and DC are relaxing licensing laws, many allowing out-of-state providers with equivalent licensing to practice in their state. Additionally, Medicaid programs in 46 states and DC have issued guidance to expand coverage or access to telehealth during this crisis, while 38 states and DC have granted payment parity for at least some telehealth services as of May 5, 2020. Despite most states moving to expand Medicaid coverage of telehealth services, these changes are not uniform across states, and barriers to implementing and accessing telehealth more broadly are likely to remain during this emergency. KFF is tracking other state Medicaid actions to address COVID-19, found here.

Voluntary Changes to Telehealth by Commercial Insurers

When not mandated by the state, private insurers are free to decide which telehealth services their plans will cover. Therefore, changes to telehealth benefits as a result of COVID-19 vary by insurer. Several major health insurance companies have voluntarily expanded telehealth coverage for fully-insured members (Appendix). Many insurers are reducing or eliminating cost sharing for telemedicine, for a limited period of time. For some plans this applies only to telehealth visits related to COVID-19, while for others this applies to any health indication. Some insurers are expanding their coverage of telehealth benefits, allowing more services, patient locations (e.g. home) and modalities (e.g. phone) to qualify for coverage. To make these services more readily accessible to patients, some insurers are working to increase their numbers of in-network telehealth providers within their existing networks of care, while others are contracting with specific telehealth vendors to provide these services. For example, First Choice Health will waive cost-sharing for telehealth if care is delivered via the 98point6 platform, and Oscar will do so if delivered by the Doctor on Call service. Florida Blue and Prominence Health Plan will waive copays for telehealth if using the Teladoc platform (Appendix). Therefore, patients may not be able to talk to their usual providers, if restricted to certain telehealth platforms by their insurance provider. Insurers responding to the novel coronavirus allow self-insured plans greater flexibility compared to fully insured plans in implementing these new changes, providing an opt-out or opt-in option.

Health System Changes to Telehealth

Prior to the start of the COVID-19 outbreak, more than 50 U.S. health systems already had telemedicine programs in place, including large health centers like Cleveland Clinic, Mount Sinai, Jefferson Health, Providence, and Kaiser Permanente. Meanwhile an estimated 15% of physicians had used telemedicine to facilitate interactions with their patients. However, many health systems did not have existing telemedicine infrastructure, and many providers are novices to providing care through telemedicine. As health systems and smaller practices implement or ramp up use of telemedicine in response to this crisis, there are many provider facing and patient facing considerations to address. Health systems will need to decide whether to invest in telemedicine infrastructure for long-term use, or if they are looking for shorter term, potentially cheaper, solutions solely to respond to this acute crisis.

Provider Facing Considerations

Investing in Telecommunications Infrastructure

For those wishing to initiate a telemedicine program before the COVID-19 emergency, significant financial and personnel investment was typically required. Costs included hiring programmers to create a telemedicine platform, ideally one that integrates into an existing electronic health record, protects patient privacy, and can charge for visits if needed. Alternatively, health systems could contract with existing telemedicine platforms to provide these services. In a 2019 study by Definitive Healthcare, many outpatient practices reported not investing in telehealth due to these financial barriers.

With new telehealth flexibility and relaxation of privacy laws in response to COVID-19, some of these financial hurdles may be lessened. For example, providers can now use phone calls, or affordable technologies like Facetime and Zoom, for many patient encounters, at least for the time being. If and when the regulatory environment around telehealth and HIPAA becomes more stringent, however, providers will need to decide whether to invest in more robust telemedicine platforms to continue to provide these services. This may be beyond what is feasible for many smaller practices, or less-resourced clinics.

During the COVID-19 crisis, ensuring reliable internet connection, and sound and video quality on both the patient and provider end remains important for any telehealth interaction. One concern is that resource limited health organizations may not have sufficient bandwidth to achieve this. During the current outbreak, many telemedicine platforms are experiencing high volumes of patients trying to access care online which has resulted in IT crashes and long wait times to obtain a virtual appointment in some systems. Investing in IT personnel may be necessary to troubleshoot problems with telehealth visits.

Workflow and Training

Implementing new telemedicine initiatives in response to COVID-19 oftentimes requires a redesign of longstanding clinical care models. With expanding use of telemedicine in clinical settings, health systems need to decide which providers they will divert to phone lines and/or video visits and how to manage their patient flow, while still ensuring enough staff to manage in-person care. This means some telemedicine platforms may need to hire more clinicians in order to keep up with demand. While larger health systems may have the financial resources to do this, smaller and more rural practices may be stretched thin as it is. Whether it be doctors, advance practice clinicians like nurse practitioners and physicians’ assistants, or registered nurses who facilitate telemedicine interactions, all will need to be trained on telemedicine technologies, requiring additional time and resources.

Malpractice and Liability Insurance

Clinicians must ensure their malpractice or liability insurance covers telemedicine, and if needed, that it covers services provided across state lines. Hawaii is the only state to require malpractice carriers to offer telemedicine coverage, and insurance premiums may be higher if covering telemedicine. During the COVID-19 outbreak, there are many clinicians who are first-time users of telemedicine, who must ensure they are covered before providing services.

Patient Facing Considerations

Access to Technology

Access to telemedicine may be particularly challenging for low-income patients and patients in rural areas, who may not have reliable access to internet through smartphones or computers. A KFF study showed that in 2017, sizable shares of non-elderly adults with Medicaid reported they had never used a computer (26%), did not use the internet (25%) and did not use email (40%). Additionally, a study by the Harvard School of Public Health showed that 21% of rural Americans reported access to high-speed internet is a problem for them or their family. Telemedicine solutions may also be less feasible for seniors.  Because older patients are at higher risk for severe symptoms of coronavirus and in general require more frequent primary care, they may benefit greatly from telehealth to reduce in-person risk of exposure. However, many seniors may not feel comfortable or be able to use these technologies. According to Pew Research Center, 27% of U.S. adults aged 65+ reported they did not use the internet in 2019. Based on the results of a March 2020 KFF Health Tracking Poll, nearly seven in 10 adults 65 and older (68%) say they have a computer, smart phone or tablet with internet access at home (compared to virtually all adults ages 30-49 and 85% of adults ages 50-64). However, this may not translate to widespread use of telehealth among older adults, particularly when Medicare’s expansion of telehealth services for people in traditional Medicare is at the moment limited to the duration of the public health emergency. While studies show some interest in telehealth among older individuals, concerns include perceived poorer quality of care, privacy issues and difficulty using technology.

Quality of Care

While use of telehealth has opened the door for patients to maintain access to care during this public health crisis, ensuring quality of care of telehealth visits is still important. There are some inherent differences to evaluating patients remotely from their homes compared to in-person. For patients with possible coronavirus infection, taking a thorough history via telemedicine is relatively straightforward, including reviewing symptoms, travel history and exposure history. However, taking important vital signs like a temperature and oxygen saturation proves challenging, particularly if the patient does not have a thermometer or pulse oximeter at home. Without specialized equipment, providers also cannot listen to a patient’s lungs to assess for signs of pneumonia. Further, currently almost all coronavirus testing is happening in person, although the FDA recently approved the first at-home test. While a limited telemedicine assessment may be adequate to determine if a patient needs to present to an emergency room/urgent care or for testing, there are the limitations of telemedicine care for this purpose.

For patients utilizing telemedicine during the COVID-19 emergency for non-respiratory complaints, virtual evaluation may prove challenging as well. For example, if a pregnant person wishes to use telemedicine for a prenatal care visit to reduce their virus exposure, monitoring routine measurements like blood pressure, weight and fetal heart rate will prove challenging if not already set up to do so at home. If a patient needed to buy home monitoring equipment like a blood pressure cuff or a glucose monitor, it remains unclear if this would be paid for by the patient out of pocket, or by the health system.

What more could be done to expand and sustain access to telemedicine during the COVID-19 pandemic and beyond?

In response to the unprecedented pressure to expand services and control the transmission of the novel coronavirus, the federal government, many states governments and commercial insurers are expanding coverage of telemedicine and relaxing existing regulations. The federal government has focused on broadening telemedicine access for Medicare beneficiaries, and waiving enforcement of HIPAA to enable use of video platforms like Facetime and Skype. Many states have relaxed telemedicine written consent, licensing, and online prescribing laws, while expanding coverage in Medicaid and fully-insured private plans. Meanwhile, many health centers have rapidly redesigned their existing models of care to implement telemedicine.

While these unprecedented and swift measures have been taken to broaden telemedicine access during this pandemic, gaps in coverage and access to telemedicine remain. Coverage and reimbursement of telemedicine is still far from uniform between payors, and most changes to telehealth policy are temporary. If the U.S. wishes to invest in telemedicine over the longer term, more permanent measures may need to be taken. Avenues to consider to further expand telemedicine access include:

• Ensuring service parity and payment parity for telemedicine care as compared to in-person care, to help expand covered services for patients, and incentivize clinicians to provide this model of care
• Ensuring patients can access telemedicine services from their homes (home as “originating site”), to further enable social distancing practices
• Allowing use of audio-only phone for telemedicine visits, to help ensure access for patients who do not have live-video technology
• Investing in telecommunications infrastructure for less-resourced sites of care, and ensuring internet access to patients in rural areas. This may involve providing direct funding for health systems and smaller practices to implement telemedicine

There are potential trade-offs in loosening regulations on telemedicine, including privacy issues and quality of care. Depending on the insurer, some patients may be able to engage in telemedicine visits with their usual providers, while some may have to see providers from specific telemedicine vendors, outside of their usual source of care. This could create discrepancies in access and continuity of care. Additionally, expanding coverage of telemedicine may result in increasing health spending, if patients use telehealth in addition to in-person care, rather than as a substitute. With all these factors in mind, it will be up to policymakers, payors, and providers to determine if the changes made to telehealth policy in light of COVID-19 outweigh the potential concerns, if they should remain permanently, and if telemedicine helps enable accessible, quality health care.