Newswise — Americans who get seriously ill from COVID-19 in 2021 might have to pay thousands of dollars in bills from their hospitals, doctors and ambulance companies, a new study suggests.

The new University of Michigan analysis has implications for both policymakers and people who haven’t yet gotten vaccinated. The authors published their findings as a preprint because of their timeliness, and are submitting their analysis for peer review.

Most health insurance companies voluntarily waived co-pays, deductibles and other cost-sharing for hospitalized COVID-19 patients in 2020, but many major insurers lifted those waivers in early 2021.

Based on data from actual patients hospitalized for COVID-19 last year, the study suggests the lack of waivers could mean bills of about $3,800 for people with job-related or self-purchased insurance, and $1,500 for people with Medicare Advantage plans.

“It is premature for insurers to stop protecting patients from the costs of COVID-19 hospitalizations,” says lead author Kao-Ping Chua, M.D., Ph.D., a health policy researcher and pediatrician at Michigan Medicine and the Susan B. Meister Child Health Evaluation Research Center. “Even though hospitalization levels are decreasing, more than 20,000 people are hospitalized for COVID-19 in the U.S. right now. The pandemic is not over.” 

The new study analyzes more than 4,000 COVID-related hospitalizations of people with private insurance and Medicare Advantage insurance between March and September 2020. The data come from the IQVIA PharMetrics Plus for Academics Database, which includes claims data from multiple insurers across the U.S.

The researchers found that the vast majority of patients didn’t have to pay for hospital services such as room-and-board changes, suggesting their plans waived cost-sharing for bills sent by hospitals. However, among the few patients who did have to pay for hospital services - a sign that a waiver wasn’t in place – out-of-pocket costs were in the thousands of dollars.

“Our findings illustrate the potential burden that patients now may face if they are covered by insurers that never implemented cost-sharing waivers or let their waivers expire,” says Chua.

Waivers don’t always cover bills from doctors

The study also suggests that insurer cost-sharing waivers for COVID-19 hospitalizations don’t always cover all hospitalization-related care.

For example, patients in the study frequently received bills from the doctors who cared for patients in the hospital as well as from ambulance companies.

Overall, 71% of privately insured patients received a bill for any hospitalization-related service, with an average size of $788. Among those with Medicare Advantage coverage, 49% received a bill, with an average size of $277.

Chua notes that some insurers may only have waived cost-sharing for the hospital portion of the bill, but believes it is possible that some patients were mistakenly billed for services from doctors and ambulances because insurers implemented their waivers incorrectly or health care providers did not code all aspects of the care as being related to COVID-19.

For people who do receive a bill for COVID-19 hospitalization-related care, Chua recommends that they contact their insurer to ask whether the bill was sent in error.

Policy implications

To prevent other patients from getting the large bills sent to some patients in this study, Chua says federal policymakers could require insurers to waive costs of COVID-19 hospitalization-related care throughout the pandemic – just as they already do for COVID-19 testing and vaccination.

Hospitals that received special pandemic funding are already barred from billing patients directly for costs beyond what their insurance covers. Hospitals also get reimbursed by the federal government when they care for uninsured COVID-19 patients.

“Charging patients for COVID-19 hospitalizations makes little sense when the pandemic is still sending thousands of people to the hospital each week,” Chua says. “The threat of high costs might cause some patients with COVID-19 to delay going to the hospital, increasing their risk of severe illness or death.”

Chua and colleagues also recently published a paper looking at out-of-pocket costs for people over 65 in Medicare Advantage plans who were hospitalized for influenza, as a way to estimate potential out-of-pocket spending for COVID-19 hospitalizations. That paper found the average bill for influenza hospitalization was around $1,000.

In addition to Chua, the authors of the preprint are Nora Becker, M.D., Ph.D., a primary care physician and health economist from Michigan Medicine, and Rena Conti, Ph.D., an associate professor and health economist from Questrom Boston University School of Business.

Chua and Becker are members of the U-M Institute for Healthcare Policy and Innovation.