Insurers Balk at Idea of Covering Unlimited At-Home COVID Tests

Recently, the Biden administration unveiled a plan to curb COVID-19 infections that promises forthcoming guidance “to clarify that individuals who purchase OTC [over the counter] COVID-19 diagnostic tests will be able to seek reimbursement from their group health plan or health insurance issuer and have insurance cover the cost during the public health emergency.”

Health insurers and health care policy researchers have a bevy of questions and concerns about this plan — and at least one public health expert has floated a different approach.

First of all, the Alliance of Community Health Plans (ACHP) takes issue with the White House’s suggestion that the forthcoming guidance — expected by Jan. 15 — is just a clarification of current regulations, says Michael Bagel, the trade group’s director of public policy.

“This is new policy for us; insurers are not covering at-home tests unless they were ordered by a provider, and those are very, very limited circumstances,” Bagel tells AIS Health, a division of MMIT. “This is a whole new area, which has, at its core, significant questions about the financial implications, the operational considerations, the availability of supply and the purposes for how these tests will be utilized.”

The Families First Coronavirus Response Act and the CARES Act require private health insurers to cover coronavirus tests, with no cost sharing, as well as any services associated with those tests (such as administrative fees). Since then, both the Trump and Biden administrations have clarified that insurers must only pay for testing conducted for “individualized diagnosis or treatment” that takes place “when medically appropriate for the individual, as determined by the individual’s attending health care provider in accordance with accepted standards of current medical practice.”

That means insurers do not have to cover tests conducted for public health surveillance or employment purposes — though ACHP has pointed out previously that insurers often have to reimburse testing claims that they aren’t yet sure are for diagnostic purposes only.

Unanswered Questions Abound

Now, with insurers poised to be required to cover a wider swath of tests, ACHP and its member plans are not the only ones with burning questions.

“Right now many plans are NOT covering at-home COVID tests without prescription or provider order. This could change [with] guidance expected by Jan. 15,” Krutika Amin, Ph.D., associate director of the Kaiser Family Foundation’s program on the Affordable Care Act, wrote in a recent Twitter thread.

“Other questions remain on how insurance coverage for at-home COVID-19 tests plays out,” she added. “Will health plans cover at-home COVID-19 tests directly at the counter? When does the requirement start? Can consumers buy at-home tests now for reimbursement in future?”

One major question Bagel has is how many tests consumers should be able to receive reimbursement for in any given time period. Health care providers, he points out, would likely not authorize polymerase chain reaction (PCR) tests on back-to-back days for most patients, so reasonable limits also should be placed on rapid at-home tests.

“And that directly impacts, of course, the cost side of this, which is, as a health plan, we are the steward of the premium dollar,” he tells AIS Health. “We want to make sure that we’re using that to the best of our ability, and we have priced our products next year not knowing that this would be a requirement on us.”

One of ACHP’s member plans, he explains, has told the trade group that if 5% of their customers sought reimbursement for one box of at-home COVID-19 tests per week, “that would essentially take out their entire operating margin they had planned for 2022.”

He also notes that prices for at-home COVID tests, which can be bought at local pharmacies as well as online, vary considerably, and it’s not clear whether the Biden administration’s guidance will encourage consumers to choose the lowest-cost tests.

What’s more, it’s important to consider the operational costs of fulfilling reimbursement requests, which unlike provider-submitted electronic claims will likely have to be manually submitted, filed, reviewed and paid. “It’s possible that, depending on the cost of the test, the operational cost to actually enter in that claim and pay it would be more expensive than the actual cost of the test itself,” Bagel says.

But the biggest unknown, Bagel says, is “the fraud, waste and abuse angle.”

“We would never assume that there would be fraud waste or abuse in the system, but pragmatically we appreciate that there are unfortunately nefarious actors out there who would try to take advantage of this opportunity,” he tells AIS Health. “Whether that be submitting false claims, purchasing tests and then reselling them…[or] someone taking too many tests that’s not clinically required.”

Should Government Hand Out Free Tests?

A better solution, Bagel suggests, would be for the federal government to take a page from other developed countries and provide free, at-home COVID tests to Americans directly.

During a Dec. 6 briefing with journalists, White House Press Secretary Jen Psaki ignited a debate over that very issue when a reporter pointed out that in countries like Germany or South Korea, inexpensive or free tests are widely available at places such as libraries. “Should we just send one [test] to every American?” Psaki sarcastically retorted — a response that drew criticism from a host of policy and public health experts who said the answer to her question is actually a resounding “yes.”

Leana Wen, M.D., an emergency physician, former Baltimore health commissioner and CNN medical analyst, offered up a different idea in a recent opinion piece for The Washington Post.

“I think this could be an opportunity for Biden to enlist insurance companies in a new way that not only incentivizes testing but also vaccination and even preventive measures that go beyond COVID-19,” she wrote.

Rather than ask Americans to pay out-of-pocket for coronavirus tests and then complete the onerous process of filing for reimbursement, “insurers can negotiate directly with manufacturers to purchase tests at a heavily discounted price,” Wen suggested. The Biden administration could then “guarantee that everyone who has private or government-sponsored insurance — more than 91 percent of Americans — receives a monthly packet of at-home antigen tests, enough for all members of their household to test twice a week.” If any given family uses up its supply before the next shipment comes, they would simply have to send a text or email, and more would be sent to them at no added cost.

Insurers That Fund Tests Now Could Save Later

“The Biden administration could make the case to insurers that it’s in their interest to blanket Americans with tests to save on health-care costs down the line,” according to Wen, who pointed out that a general COVID-19 hospitalization costs more than $74,000, and the charge for a complex hospitalization goes up to an average of more than $317,000.

“To further incentivize testing as a prevention strategy, insurance companies could offer a discount to those who take regular tests,” she added. “Imagine if people who log their twice-weekly tests online are rewarded with a lower insurance rate in recognition of their proactive measures to protect their health.”

For his part, Bagel seemed to endorse Wen’s suggestion sharing her op-ed via Twitter with the commentary: “Great op-ed @DrLeanaWen. @CMSGov must work with @_ACHP on a testing strategy that works.”

Contact Bagel via Tricia Busch at

© 2022 MMIT
Leslie Small

Leslie Small

Leslie has been reporting and editing in various journalism roles for nearly a decade. Most recently, she was the senior editor of FierceHealthPayer, an e-newsletter covering the health insurance industry. A graduate of Penn State University, she previously served in editing roles at newspapers in Pennsylvania, Virginia and Colorado.

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