The Changing Landscape in Who’s Paying for Healthcare

Congress has just a few weeks before its August recess to start reaching across the aisles and come together on the next COVID-19 package. House Democrats have already put forward their proposal for $3 trillion in funding, mostly for support of state and local government and individual employees and families, while the White House last week said it would like to see support for tourism and hospitality sectors in the package. There are indications that a proposed package from Senate Republicans may be made public as early as this week, possibly including legislation on business liability protections in a $1 trillion package.

Congress did work together earlier this month to extend the expired Paycheck Protection Program (PPP) for small businesses that still had $130 billion of the funding unspent. Congress extended the PPP to August 8^th.

To date, of all the business sectors the healthcare and social assistance industries received the most funding from the PPP, accounting for 13% ($67.4B) of the program’s funds. Five percent of all physician’s offices and five percent of all dental offices in the country received PPP funds.

Reimbursement of COVID-19 Tests

The CARES Act requires that patients are not supposed to pay anything out-of-pocket to take a COVID-19 diagnostic test. However, according to new FAQs coming out of CMS, this prohibition on patient cost-sharing does not apply to diagnostic tests that employers give to employees, for public health surveillance, nor for any other testing that is not intended specifically for the individualized diagnosis of COVID-19.

In short, individuals may have to pay something if anyone, but a healthcare provider has them take the test. As we’ve seen, testing is ramping up across the country and this CMS guidance may have a significant impact on whether consumers will be the ones paying for it.

Within days of CMS releasing this guidance, House Democrat leaders sent a letter to the administration arguing that, according to the CARES Act, individuals should not have to pay for ANY COVID-19 tests, regardless of the reasons for the test or who gives them the test.

Stay tuned to see where CMS and the Administration land on this.

State activities

Telehealth waivers passed at the beginning of the pandemic are being made permanent through state actions.

Colorado legislators just passed a law that prohibits plans from putting limits on location, certification, or technology with regard to telehealth. Similarly, the governor of Idaho made permanent all of the telehealth waivers and all other emergency healthcare orders issued during the pandemic. In most cases, these permanent telehealth laws would apply to all commercial fully insured plans. Expect this trend to continue at the state level.

Another trend we’re seeing in the states are changes in Medicaid. Oklahoma voters just approved Medicaid expansion allowed under the Affordable Care Act, making Oklahoma the 38^th state, including D.C., to do so. 71 million people are currently enrolled in Medicaid. One estimate has Medicaid enrollment increasing overall by 16% during the pandemic.

In the midst of this, Medicaid managed care is getting a boost: The governor of North Carolina signed a law earlier this month that would move 1.5 million residents from Medicaid fee-for-service into private managed Medicaid plans. Anthem recently reported that more than 400,000 have been newly enrolled in its Medicaid managed care plans.

In sum, there is a significant shift of people moving from employer-based health benefits to Medicaid and Exchange health plans due to the loss of jobs caused by the pandemic. The result is a substantial change in who is paying for healthcare in this country.

 Programming Note: Matthew Albright is a permanent panelist on Monitor Mondays. Listen to her live reporting every Monday at 10 a.m. EST.