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Health insurers in Alabama stopped waiving cost-sharing requirements months ago

Published: Sep. 23, 2021 at 3:53 PM CDT
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BIRMINGHAM, Ala. (WBRC) – A Kaiser Family Foundation analysis found most insurance companies are reinstating cost-sharing requirements for COVID hospitalizations after waiving them earlier in the pandemic.

“Earlier in the pandemic we found that most health insurers were waiving out-of-pocket treatment costs for people who may have needed hospital care,” said Krutika Amin, Associate Director, Program on the Affordable Care Act, Peterson-KFF Health System Tracker.

She added, “What we found was that 72% of the two largest plans in each state and in DC has phased out their COVID cost-sharing waivers as of August 2021. Another 10% are set to phase out their cost-sharing waivers by October of this year.”

There is no federal mandate requiring health insurers to waive COVID out-of-pocket costs but many, including the largest in Alabama, did.

“It’s very, very rare for an insurance company to give benefits in addition to their benefits on purpose,” said Dr. Lars Powell, Director, Center for Insurance Information and Research, University of Alabama.

Dr. Powell said insurers likely waived these costs because of savings elsewhere.

“It could be based on an off-set, maybe there was other things they were spending less money on because hospitals were closed and people couldn’t go to the doctor, and that’s a fair reason, when the hospitals open back up, it makes sense that they would undo that provision.”

Amin’s research found insurers are reinstating costs as unvaccinated people account for a majority of COVID hospitalizations nationwide, but in Alabama, insurers ended these waivers before a vaccine was widely available.

Blue Cross Blue Shield of Alabama waived copays, inpatient deductibles and coinsurance for fully insured employer customers treated for COVID-19 at an in-network hospital from March through May 2020.

Viva Health covered hospital treatment at 100% for Viva Health fully-insured and Viva Medicare plans through December 2020.

UnitedHealthcare waived cost-sharing for fully insured groups through January 2021.

At the end of January, COVID vaccines were only available to frontline critical workers and people 65 and older in Alabama.

“It doesn’t seem like a real sinister thing of the insurance company to make you follow the rules of the contract, although maybe they’ve created some sort of expectation above that by altering the contract in the first place,” said Dr. Powell.

The average out-of-pocket costs for a typical hospitalization can range from $1,300 to $8,000, depending on the specifics of a patient’s plan and their out-of-pocket maximums, according to KFF.

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