Wednesday, February 26, 2020

The card spells MOOP: Will Covid-19 expose Americans to financial risk?

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The Miami Herald reports that a man who developed flu-like symptoms after a business trip to China did what he felt was the right thing and went to the hospital to get tested for the Coronavirus. Hospital officials wanted to give him a CT-scan, but since he knew his insurance was limited, he asked for a flu test first.  Smart move. He tested positive for flu, and that was that -- except for the $3,270 bill that came later, with more to come.

The hospital told him that his share of the bill was $1,400. The story then focused on the fact that this man was in a short-term, limited duration plan that demanded he supply three years of medical records to prove that he didn't have a "pre-existing condition," i.e., a recent prior bout of flu.

That's outrageous, but it misses a broader point about Americans' financial exposure when the Coronavirus spreads. If this individual's medically underwritten policy does pay out, he's not necessarily in a worse financial position than the average insured American who walks into a hospital with suspected Covid-19.

In employer-sponsored insurance, the average single-person deductible in 2019 was $1,655, according to the Kaiser Family Foundation. 28% of covered workers had a single -person deductible over $2,000.   The median annual maximum out-of-pocket (MOOP) limit (after which the plan pays 100% of covered expenses) was $4,000 (the maximum allowable is $8,100). About two thirds of employer plans require coinsurance for inpatient hospital stays, averaging 20%.

I want to learn more about the treatment and costs an American will be in for if she gets tested for Covid-19 and if she tests positive. Will she have to go into a hospital isolation chamber? If so, I imagine she'd hit her MOOP more or less immediately.  [UPDATE, 2/29: Sarah Kliff cites an $4,293 estimated average cost for a day in a U.S. hospital, in a story that makes concrete the costs that Coronavirus patients may face.]  Will people be sent home to self-quarantine, as many were in China? If feasible, I imagine that self-quarantine might be the path of choice for many Americans, for financial reasons.

As for the various tests and treatments involved, how likely are Americans to be exposed to balance billing? [Probably not for the direct Covid-19 test, per update below.] Pathology is a balance billing hotbed, as is emergency treatment generally.

Americans' exposure to medical costs, for the insured as well as the uninsured, is uniquely high among wealthy nations. Unless special provision is made in this country to pick up people's costs for testing and treatment, fear of financial exposure could be a major impediment to containing the disease.

UPDATE: In at least one integrated delivery system, the direct test for Covid-19 is no charge to patients. The test for other pathogens, the Respiratory Pathogen Panel (RPPCR), requires an ordinary lab testing copay. If the person being tested meets the criteria for a person at risk, the person should be isolated and masked. Whether an isolation procedure involves significant cost, or whether a patient at a doctor's office or urgent care center  who meets the risk criteria would be sent to a hospital for the testing, I don't know.

UPDATE 2, 2/27/20: I spoke to Bradley Flansbaum, a hospitalist working in population health at Geisinger in Pennsylvania, about out-of-pocket costs likely to be triggered by Covid-19. He does not anticipate a kind of conveyor belt that would suck people into hospital isolation; likely protocols will develop in which people with non-life-threatening symptoms will be sent home and instructed how to self-isolate.  If that is correct, then only Americans' normal wariness of incurring high costs ("normal" for Americans, almost uniquely in the developed world) will keep them from seeking care, as  doubtless occurs with severe cases of flu. Who bears the cost of Covid-19 testing has yet to be determined, but given the urgency of identifying cases, local, state, or federal agencies will likely carry the burden. For other routine expenses such urgent care, ER visits, or ambulatory care follow up, usual rules as per the patient's payer will apply.

UPDATE 3, 3/4/20: Also in the mix: possible mandatory self-quarantine outside the home, in dedicated motels or temporary shelters.

See also next post: Will Americans' fear of high medical bills deter Coronavirus containment?

1 comment:

  1. Sound like full coverage of all required testing and treatment for Covid-19 is a stipulation we should be pushing Congress for, now that its considering the Administration's funding request on the virus and whether it is remotely sufficient. If our government truly wants to avoid a national panic about this virus, knowing that government "has our back" financially one way or the other is an important part of the response. Thanks, Andy.