The Biden administration just announced a new policy that could help increase the affordability of home COVID-19 tests for the millions of Americans on private health insurance. Beginning on January 15, private health insurance plans will be required to pay for eight at-home COVID-19 tests per person, per month.
“The new coverage requirement means that most consumers with private health coverage can go online or to a pharmacy or store, buy a test, and either get it paid for up front by their health plan, or get reimbursed for the cost by submitting a claim to their plan,” according to a press release from the Centers for Medicare & Medicaid Services (CMS) at the U.S. Department of Health and Human Services (HHS). The policy applies to both group health plans provided through employers and plans purchased in the individual marketplace.
The requirement covers all over-the-counter COVID-19 tests that have been authorized, cleared, or approved by the U.S. Food and Drug Administration (FDA), according to the CMS. People will not need a prescription or prior authorization from their provider to get the rapid tests covered. The per-person limit applies to each covered family member. So, for instance, a family of five people on the same plan could have up to 40 COVID-19 tests paid for every month.
There are two ways to get the tests. The first: you can purchase the tests directly from your insurer’s preferred pharmacies or retailers, with zero out-of-pocket cost to you. (The policy is set up in a way that is incentivizing insurers to set up these preferred seller networks, according to the CMS release.) In this scenario, free means free, with 100% of the price of the test paid for up front and no cost-sharing burden on the individual. (This means you will not have to meet a deductible first or put up a co-payment, and you will not be charged a coinsurance fee later.)
Alternatively, you can purchase a COVID test from a pharmacy or retailer (including online) outside of your plan’s preferred network and then submit a claim for reimbursement. Insurers will later reimburse you for the cost, up to $12 per individual test. So, even if your insurer has a network of preferred sellers set up, they will still have to reimburse people (up to $12) for a test purchased elsewhere.
The new policy will affect the majority of Americans, 60% of whom have private health insurance according to preliminary 2021 data from the National Center for Health Statistics (NCHS) at the Centers for Disease Control and Prevention (CDC). “Today’s action further removes financial barriers and expands access to COVID-19 tests for millions of people,” said CMS Administrator Chiquita Brooks-LaSure. Sabrina Corlette, J.D., a research professor at Georgetown University’s Center on Health Insurance Reforms, told the New York Times that the new policy could help families save hundreds of dollars on COVID-19 tests each month.
While it’s a significant step, the new insurance policy won’t fix all the roadblocks facing Americans trying to get at-home COVID tests—such as the limited availability of at-home tests. “If reimbursement exists but there aren’t tests to purchase,” Kaiser Family Foundation policy analyst Lindsey Dawson told the Times, “that doesn’t help an individual consumer.” In fact, it’s possible that the new policy will actually increase demand for at-home tests and make the supply shortage worse, Dawson explained. (It’s also worth pointing out that there is an accuracy issue with many of the tests themselves, given the fact that some rapid antigen tests are not as good at detecting the omicron variant of the novel coronavirus, as SELF has reported.)
Outside of the policy, there are still testing coverage gaps for millions of Americans not on private health insurance. People with public health insurance through state Medicaid and Children’s Health Insurance Program can already get FDA-authorized home COVID-19 tests without cost sharing, according to the CMS. But people on Medicare can only get free lab tests through their plan, and only when ordered by a health care provider or pharmacist. (The HHS is also freely supplying as many as 50 million home tests to community health centers and Medicare-certified rural health clinics, per the CMS release.)
The policy also leaves out the nearly 1 in 10 Americans who do not have health insurance (9.6% of people of all ages, according to the NCHS). Offering free at-home tests on the basis of insurance coverage status “is definitely not the ideal way to lower barriers to COVID testing,” as Corlette told the Times. “But it is helpful.”