The Biden administration on Monday issued guidance that will require private health insurers to reimburse people for up to eight over-the-counter Covid-19 tests every month beginning Jan. 15.
Under the plan, private insurers can set up programs at preferred pharmacies or retailers where the upfront cost of home tests is covered for beneficiaries. A family of four would be able to have 32 home tests covered by their health plan each month.
“Plans and issuers are strongly encouraged to provide direct coverage for OTC Covid-19 tests to participants, beneficiaries and enrollees by reimbursing sellers directly without requiring participants, beneficiaries or enrollees to provide upfront payment and seek reimbursement,” states the guidance released by the Health and Human Services, Labor and Treasury departments.
The initiative is intended to ease the financial burden of utilizing at-home tests to detect and stop further spread of Covid-19. The more-transmissible Omicron variant of the virus is driving more than 668,000 infections per day, according to CDC data.
But public health experts warn that number is a vast undercount in part because results from millions of at-home tests are not being reported to state and local health departments.
“By requiring private health plans to cover people’s at-home tests, we are further expanding Americans’ ability to get tests for free when they need them,” HHS Secretary Xavier Becerra said in a statement.
Individuals who purchase home tests outside of their insurers’ preferred network must be reimbursed up to $12 per test, but plans can "provide more generous reimbursement up to the actual price of" more pricey tests, according to the guidance. Still, that could create problems for consumers who don't live near participating pharmacies or who purchase pricier home tests like Detect’s at-home molecular test, which costs $75 for a test and the reusable hub.
“We hope that insurance companies see the benefit in covering the full price of molecular home tests as increased access to these tests could allow an individual to get treatment sooner — which ultimately reduces overall health care costs,” Detect spokesperson Shawna Marino said.
Michael Bagel, director of public policy at the Alliance of Community Health Plans, told POLITICO that insurers will not have enough negotiating power to bring prices down in the near future due to the Omicron wave driving overwhelming demand for at-home tests coupled with the the government’s plan to buy 500 million of the rapid tests.
“This is an unfunded mandate on insurers and consumers,” Bagel said. “There's nothing but barriers to get it set up in time. We have essentially 96 hours to get a preferred pharmacy list together and get the operational pieces in place.”
America's Health Insurance Plans CEO Matt Eyles said that while there "will likely be some hiccups" implementing the new guidance, insurers plan to work with the Biden administration to address issues as they pop up.
"We recognize that the administration’s guidance takes steps to mitigate the real risks of price gouging, fraud, and abuse, which would limit access and reduce affordability for everyone," Eyles said in a statement.
Another challenge for insurers will be tracking the number of tests individuals buy from different locations, according to Bagel. If a physician orders an at-home test for an individual, it does not count toward the eight test-a-month limit.
The new regulations governing reimbursement for at-home tests do not apply to people on Medicare or those without health insurance. State Medicaid programs and the Children’s Health Insurance Program already must cover at-home tests, according to HHS.
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