Health Insurers and COVID-19:  Adapting to a rapidly changing environment


As COVID-19 spreads throughout the United States and the resulting economic disruption continues, medical insurance carriers are responding to the needs of their customers in a rapidly changing market landscape shaped by legislative and competitive conditions. 

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At the end of the 2019 calendar year, The People’s Republic of China identified a novel coronavirus (COVID-19) that had infected dozens of patients. While authorities took steps to control the epidemic, by the end of January 2020, the virus had spread across China’s borders to countries around the world, including the United States. Shortly thereafter, the World Health Organization (WHO) declared the event a pandemic. 

As the COVID-19 situation changes on a daily basis, legislators and market participants are trying to keep up. The health industry in particular is subject to a patchwork of laws and executive orders that include the Coronavirus Aid, Relief and Security (CARES) Act, the Consolidated Omnibus Reconciliation Act (COBRA), election deadlines and government action in all 50 states. Although the final impact on insurance markets is not yet fully known and varies significantly by state, Guy Carpenter is providing the following view of how key pieces of the industry, including COVID-19 treatments, testing, telemedicine, prescriptions and eligibility, are impacted.

On March 18, 2020, Congress passed the Families First Coronavirus Response Act, which requires health insurance companies that offer individual and group health plans to waive cost-sharing charges for Food and Drug Administration (FDA)-approved COVID-19 testing. Before this law was passed, many states were already taking action in their communities by requiring carriers to waive costs for COVID-19 diagnostic tests. However, while many states’ orders now overlap with the federal law, others expanded upon the federal law. For example, while some states only require testing costs to be waived at approved in-network providers according to their residents’ plans, others like Arizona are requiring testing costs to be waived at all in-network or qualified out-of-network providers. Washington expanded on the federal law by not requiring prior authorization for COVID-19 testing, as well as requiring health insurers to cover out-of-network costs if they do not have enough in-network providers for COVID-19 testing.

For health insurers that provide coverage to large accounts with locations across multiple states, assuring consistent coverage for all employees and adhering to requirements in several jurisdictions is a challenge. While all states must adhere to the minimum requirements laid out in the Families First Coronavirus Response Act, they are able to institute their own requirements across topics not covered in the act, or can expand upon the requirements the act lays out. This creates a challenge for medical insurance carriers that have business in more than one state. We lay out an overall consensus on the varying state requirements over five different topics: 

  • cost-sharing
  • telehealth
  • grace periods
  • furloughs
  • COBRA

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