Image of mom helping son with mask

Under federal law, most insurance companies began footing the bill for COVID-19 tests, vaccines, and treatment last year. But now, as vaccination rates stall and hospitalizations soar, insurers are changing their tune. 

A recent analysis published by the Kaiser Family Foundation shows that a large majority of U.S. insurers are no longer covering COVID-19 treatment. Here’s why.  

Insurance Profits Soared During The Pandemic 

Early in the pandemic, insurance companies began waiving costs related to COVID-19 testing and treatment. The change was due in part to soaring profits among most providers. 

“Health insurance companies were spending so much less than expected,” Matthew Rae, director for the Program on the HealthCare Marketplace at KFF, told CBS News

“During the pandemic, no one went to the hospital. Elective procedures were delayed. Insurers had more money than they were supposed to.” 

According to the Kaiser Family Foundation’s analysis, insurance companies covered COVID costs for 88% of insured people. These costs include copays, coinsurance, and deductible payments.

COVID-19 Coverage By Law And By Choice 

Federal law requires all private insurance plans to cover the entire cost of COVID-19 testing. “So long as the test is deemed medically appropriate,” a November 2020 KFF analysis reportedt.

The U.S. government also pre-paid for COVID-19 vaccines. In doing so, they required the vaccine to be available at no cost to anyone, insured or not.

The cost of COVID-19 treatment, however, has no such guidelines. And if it weren’t for insurers’ profit margins last year, they might not have covered treatment at all. 

The ACA’s Medical Loss Ratio provision mandated that insurers share the wealth through rebates, waivers, or credits. 

As Vaccines Rolled Out, Coverage Reeled In 

COVID-19 vaccine rollouts began in December 2020 for health care workers and other select individuals. 

By the spring of 2021, vaccinations were widely available to all adults. In May, the FDA authorized vaccine use in kids as young as 12 years old. 

Image of getting vaccine
(BaLL LunLa / Shutterstock)

With the rise in vaccination availability came a decrease in coverage. The November 2020 KFF report found that several insurers started to phase out cost-sharing as early as November 2020. 

Today, more than 70% of the nation’s largest insurance companies are no longer waiving COVID-19 treatment costs. By the end of October 2021, an additional 10% will also phase out cost-sharing. 

How To Know If You Still Have Coverage

America’s Health Insurance Plans offers a helpful online resource for American insurance companies and their coverage plans. 

To find your insurance provider more quickly once on the page, press “Control + F” to use your find function. Then, type your insurer in the search box. You can also enable text search via your mobile browser.

Some employers, like Delta Airlines, are upping costs for those refusing the COVID-19 vaccine. If you have insurance through your job, then it’s best to contact your employer directly. 

So, is it legal for insurance companies to change coverage based on vax status? In a word, yes. 

As previously stated, federal law didn’t require insurers to cover treatment costs. These companies are ending their “goodwill” waivers for those refusing preventative treatment. 

We see this already in life insurance premiums, which can charge higher for smokers or obese individuals. Health insurers can also increase premiums by 50% for smokers under the ACA. 

Though this might sting a bit for smokers, the logic is sound. Under limited medical resources, those who actively work to maintain their health get priority. 

The Most Cost-Effective Solution? Get The Vaccine

As reported by the CDC, hospitalization rates of unvaxxed COVID-19 patients are 29 times that of vaxxed patients. The same report shows that unvaxxed individuals are five times more likely to get the virus. 

This past summer alone, COVID-19 vaccines could have prevented 100,000 hospitalizations. According to the NIH, the vaccines prevented up to 140,000 deaths.

Despite this, only 49.6% of the U.S. population is vaxxed. Many of the uninoculated are so by choice. Like smoking, insurers are starting to penalize people for this choice. 

“Now that COVID-19 is largely preventable for most adults…it makes a lot less sense for employers to be giving people who do get infected a break,” Rae told CBS

That doesn’t mean the healthcare system is leaving people high and dry. “The cost of hospitalization for COVID-19 is tens of thousands of dollars,” Rae explained. “Most people admitted to hospital are only responsible for a fraction of that.”

The most cost-effective method to avoid high insurance bills is to get vaxxed. If you or someone you know is still hesitant, I encourage you to use this resource that debunks the most common vaccine myths.

The cost of refusing to do so could be more than a few thousand dollars; it could be your life. 



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