In-Depth: Why are COVID-related medical bills going up?

In the initial months, Americans who got sick due to coronavirus got their treatment without any charge. The insurers covered all their medical costs. It is expected that people who get hospitalized due to COVID-19 will be charged thousands of dollars. It was reported that  98.8 % of people in San Diego County hospitalized with COVID since Jan. 1 has been unvaccinated. 

As per the federal government's requirement, providers have made medically necessary COVID testing and vaccines available to the public for free. On the other hand, there is no such requirement from the federal government that asks the health insurers to cover the out-of-pocket costs related to COVID-19 treatment. 

In the early part of the pandemic, many insurances companies elected to cover these costs anyway. According to an analysis done in August 2020, to waive all fees for a COVID hospitalization, 88% of people with full health insurance had an insurance plan. 

KFF health policy expert Krutika Amin said, "But in the months since, that's changed." She further stated that "With these cost-sharing waivers expiring, more and more people who are hospitalized are going to face significant medical bills that could lead to additional financial instability."

Recently, Kaiser Family Foundation has surveyed the two most extensive health plans in each state and the District of Columbia. It is estimated that, by the end of this month, almost 78% of these comprehensive plans will have ended waivers. They will then implement the standard billing for COVID treatment. This implies that people hospitalized due to coronavirus will have to pay traditional deductibles and copays, increasing rapidly.

A study conducted by the researcher of the University of Michigan estimated that for a privately insured person who gets hospitalized with COVID, the average out-of-pocket cost is $3,840. In addition, if there is a need for intensive interventions or emergency transportation, then the medical bill will be much higher. Amin also said that "For people who have not met their out-of-pocket maximum, they could be charged a significant amount."

The COVID testing cost has also now started to change. Although the  COVID tests that a doctor orders will still be accessible, insurers can charge for routine screening tests. These screening tests have become more common at schools and workplaces.

The companies that have made weekly testing of unvaccinated workers mandatory have taken care of the costs, but the others have not. According to the New York Times, some people have been charged up to $200 for screening tests.

Amin also said that insurers might be motivated by amalgamating moral and financial duties to cover last year's expenses. 

Although there was a surge of COVID patients at hospitals, insurance payouts were leveled below expected in 2021. The overall health spending also dropped during the pandemic. This is because people kept a social distance, and patients delayed their elective procedures, said Amin.

As the payouts were leveled below, the insurance companies were left with extra cash. This extra cash can't be legally pocket because there is a provision in the Affordable Care Act. This provision controls the number of money insurers can make. According to the Medical Loss Ratio, insurers must provide their customers rebates if profits exceed a certain percentage of health spending. 

Amin said that insurers used the extra cash to waive out-of-pocket treatment costs for COVID instead of offering rebates. But the equation changed upon the arrival of vaccines. 

According to federal law, insurers can't charge people differently based on their vaccination status. Amin further stated that insurance companies have already decided that they will not raise premiums in 2022 due to COVID. 

Some companies have even started to charge for COVID hospital stays in general. These costs bulk upon those who are vaccinated. Therefore Amin said, "People can avoid these costs by getting vaccinated, which are free."

As the report suggests that medical bills related to coronavirus have increased and the insurance companies' policies have also changed, a medical practice can't remain updated with such changes. This is why many healthcare units are now outsourcing medical billing services from medical billing companies like UControl Billing. Such companies stay updated regarding any changes in the insurance policies and codes that impact medical billing.