Hospital costs to treat uninsured COVID-19 patients could top $40B

By | April 9, 2020

Dive Brief:

  • The Trump administration’s plan to use the $ 100 billion in emergency COVID-19 funding approved March 27 to pay hospitals for treating the uninsured could take up as much as 40% of that funding, according to an analysis released Tuesday by the Kaiser Family Foundation.
  • Treating the uninsured for symptoms of the disease caused by the novel coronavirus will likely cost between $ 13.9 billion and $ 41.8 billion depending on factors like how prolonged the outbreak is and how many people need the highest levels of care.
  • A study in the Annals of Internal Medicine, also published Tuesday, found that layoffs triggered from the economic fallout of the pandemic will likely lead to a total of 7.3 million newly uninsured people by the end of June.

Dive Insight:

It’s still unclear how HHS plans to distribute the bulk of the $ 100 billion from the Coronavirus Aid, Relief, and Economic Security Act, but administration officials said Friday some of it would be used to pay for treatment of those without coverage. Hospital groups didn’t immediately support plan. Instead, they prefer other methods for covering those costs, such as a disaster program or additional legislation.

KFF cautioned the analysis has many caveats, but said it is based on conservative estimates on how many people will ultimately be infected and how many of them will require hospitalization and intensive care.

It’s another indication that more funding will be needed to keep the U.S healthcare system running as it faces the unprecedented crisis.

“Given the uncertainty of our estimates of the total funding that will be needed to reimburse hospitals, and the fact that infections may come in several waves over the next year, it is unclear whether the new fund will be able to cover the costs of the uninsured in addition to other needs, such as the purchase of medical supplies and the construction of temporary facilities,” the KFF authors wrote.

Ratings agencies have also said the $ 100 billion fund won’t be enough. “While the CARES Act, just passed by Congress will undoubtedly help offset losses associated with the COVID-19 outbreak, it is Fitch’s opinion that it will not completely make them whole, and that the sector will still suffer significant operational losses through the first half of calendar 2020,” Fitch Ratings wrote in a Tuesday report.

The KFF analysis is based on uninsured levels prior to the start of the pandemic, but as the Annals article shows, the rate of uninsured is expected to skyrocket as more people lose their jobs, and therefore their employer-based coverage. Already in the first two weeks of March, more than 700,000 Americans lost their jobs.

Supporters of the Affordable Care Act have called on the Trump administration to create a special enrollment period for marketplace plans, as some states have done, but federal officials have so far refused to do so.

The funds earmarked by the administration to help support the uninsured could help providers needing it least, according to a KFF expert.

The money is likely to “disproportionately be going to the hospitals in states with higher uninsured rates, which tend to be the states that have not expanded Medicaid,” one of the study’s authors, KFF Senior Fellow Karyn Schwartz, told Healthcare Dive.

In contrast, “states with lower uninsured rates like New York, where we’re seeing hospitals under a lot of stress, would get a smaller share of the money,” she said.

Another issue is surprise billing, which has yet to be explicitly prohibited. Even with funds to help cover the uninsured, the report found that uninsured patients could still be on the hook for out-of-pocket costs if they test negative for coronavirus or receive care outside a hospital. It’s also unclear if separate bills for physicians’ services during hospital stays will be covered.

“Given how low the incomes are for people who are uninsured, and given that so many people are going to be losing their jobs, several thousand dollar bills would be pretty tough for people to afford,” Schwartz said.​

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