Hospitalized COVID-19 patients may have paid up to $4,000 in out-of-pocket costs despite insurance company waivers for virus-related treatment, study finds 

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  • Insurance companies instituted cost discounts for COVID-19-related expenses last year, although they were not all-inclusive and many still faced costs out of their own pocket.
  • A new study finds that nearly 70% of privately insured patients faced out-of-pocket expenses despite discounts
  • Some privately insured patients still faced bills up to $4,000 and Medicare Advantage patients had out-of-pocket costs of $1,500
  • Many facilities, pharmacy and ambulance related costs were not included in some exemptions

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A new study has found that despite discounts implemented by insurance companies for treatment related to COVID-19 by 2020, some hospitalized patients still paid thousands.

When the pandemic hit last year, insurance companies waived most virus-related costs in a show of goodwill to customers and a way to dodge the health care premium waiver mandated by Obamacare.


But researchers at the University of Michigan Ann Arbor found that not all exemptions were all-inclusive, however.

This means that privately insured patients were still facing bills of up to $4,000 and Medicare Advantage patients were spending $1,500 out of pocket.

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Some privately insured patients still faced bills of up to $4,000 and Medicare Advantage patients out-of-pocket costs of $1,500, a new study finds. Pictured: Healthcare worker Demetra Ransom comforts a patient in the COVID-19 ward at United Memorial Medical Center in Houston in December 2020

The majority of privately insured patients, 71.2%, faced out-of-pocket costs related to COVID-19 treatment despite cost discounts by insurance companies (right).  The patients who paid the most were charged the facility fee, which was charged from 5% of the patients (left)

The majority of privately insured patients, 71.2%, faced out-of-pocket costs related to COVID-19 treatment despite cost discounts by insurance companies (right). The patients who paid the most were charged the facility fee, which was charged from 5% of the patients (left)

The researchers, who published their findings on Monday jama network open, collected data from 7.7 million privately insured patients and 1.1 million people on Medicare Advantage plans.

More than 4,000 patients in the study group were hospitalized with the virus at some point from March to September 2020.

Of the 1,377 privately insured patients, 981, or 71.2 percent, paid an average of $788 out of pocket.

But about five percent of those taking out private insurance were billed large sums of money for convenience services, with an average out-of-pocket cost of $3,840.

About two percent of patients on private insurance had to pay more than $4,000 mainly due to facility costs.

‘Facility services’ include hospital accommodation, laboratory and pharmacy services, the researchers write in the study.

These are the most expensive services, and the researchers note that they were covered within out-of-pocket discounts for a large portion of insurance plans.

‘If the absence of out-of-pocket expenses for facility services is indicative of the presence of an insurer cost-sharing discount for these services (an assumption supported by our analyses), most studies were covered by hospital insurers who received the least discount. The cost sharing for the facility services was given,’ the researchers wrote.

‘If this were true, the high incidence of out-of-pocket expenses for professional and ancillary services suggests that many insurers may fail to capture all care related to cost-sharing discount hospitalization.’

Other ancillary and professional charges that the patients faced included miscellaneous claims such as use of an ambulance, services rendered by a physician and use of medical equipment.

Since the exemption was enforced by the private insurance companies themselves – rather than being mandated by the federal government didn’t they – They didn’t need to be all-inclusive.

Whether the exemption was intentionally non-inclusive, however, cannot be determined by the researchers.

The researchers wrote, ‘Whether this failure was intentional is not clear.

‘Unlike COVID-19 testing and vaccination, there is no federal order for insurers to waive cost sharing for COVID-19 hospitals. As a result, insurer discounts can be skewed, with some applying only for facility services and others applying more broadly for hospitalized care.’

Some of the out-of-pocket costs that patients incur may also be the result of administrative errors.

“Even if insurers intend the waiver to capture all care related to hospitalization, there may be implementation problems,” the team wrote.

‘For example, patients may be billed incorrectly if insurers do not link the clinic’s inpatient assessment and management bills to COVID-19 hospitalization.’

While Medicare Advantage patients paid less, many faced out-of-pocket fees despite the cost discounts.

Most patients paid an average of $277 when billed by physicians.

However, when billed to hospitals, the average cost was $1,536 0.2 percent of patients are being charged more than $4,000.

The exemptions were implemented early in the pandemic, and served few jobs for insurance companies.

First, it was a show of goodwill at the start of the pandemic, when the lives of millions were plunged into uncertainty.

Second, it helped increase the amount that insurance companies were spending on ‘medical losses’.

Part of the Affordable Care Act, a 2010 law often referred to as ‘Obamacare’, there was a provision that insurance companies must spend at least 80 percent of the revenue brought in through premiums on medical expenses.

Any amount paid by the company to be less than 80 per cent must be returned to the customer by way of an insurance rebate.

This is to avoid insurance companies that are driving up premium costs too much and spending most of the money on internal administrative costs.

Insurance companies still fail to reach 80 percent despite discounts, however. $2.1 billion discount Dues to customers after 2020.

These exemptions have largely disappeared in 2021, with people who are hospitalized late in the pandemic costing thousands to get treatment.

‘Findings suggest out-of-pocket costs for COVID-19 hospitals may …


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