As Insurers End COVID-19 Grace Period, Patients Can Expect Hospital Bills

Key Takeaways

Thousands of people have been hospitalized for COVID-19 in the past year, and generally, most patients haven’t had to pay out of pocket for these costs. Government programs and insurance companies have largely borne the brunt of the cost. But that might be changing.

Researchers at the University of Michigan and Boston University suggest in a new study that a subset of people hospitalized for severe COVID-19 in 2021 may owe almost $1,000 or more in out-of-pocket expenses as public and private health insurance companies begin to phase out cost-sharing waivers.

Put simply, the waivers enable insured patients to receive medical care for SARS-CoV-2 infection or related complications at no additional cost to them in the form of copays, deductibles, or coinsurance. Issued en masse at the beginning of the pandemic as companies scrambled to adjust their policies to the circumstances, many such waivers are nearing or have already passed their original expiry date.

Deductible vs. Copayment: What’s the Difference?

The researchers,Kao-Ping Chua, MD, PhD, assistant professor of pediatrics at the University of Michigan Medical School, andRena Conti, PhD, associate professor of markets, public policy, and law at Boston University’s Questrom School of Business, argue that federal policymakers should pass legislation preventing the waivers from being entirely retired.

It “makes absolutely no sense” to saddle patients with the oft-sky-high costs of inpatient treatment for a severe respiratory disease that has already claimed more than 500,000 lives nationwide, Chua tells Verywell.

“Cost-sharing is potentially justified if it decreases use of low-value, unnecessary health care," Chua says. “But COVID-19 hospitalizations are not low-value care—they are life-saving care. We should not penalize people for getting sick.”

In addition, he says, cost-sharing could potentially hurt patient outcomes.

What Is Long COVID?

“The last thing we need is to have sick people avoid the hospital because they are afraid of the costs," he says. “There is also accumulating evidence that recovery from COVID-19 hospitalizations can take months, meaning many patients cannot work. Adding a hospitalization bill would only exacerbate financial stress.” Their February study was published in theAmerican Journal of Preventive Medicine.

What This Means For You

In order to come to these estimates, the researchers analyzed the worst flu season on record since the 2009 Swine Flu pandemic. While it’s no match for COVID-19, the seasonal flu hit the U.S. particularly hard in 2018.

Flu Symptoms and Treatment

With the pandemic in full swing, Chua and Conti received funding from the National Institutes of Health to conduct an analysis of this data for the purposes of calculating the average cost of a serious respiratory illness and its treatment for elderly individuals and families. The central analogy is approximate rather than an exact one—COVID-19, after all, is taking a far greater toll on the country and the world than even the most virulent strain of influenza.

Coronavirus (COVID-19) and the Flu: Similarities and Differences

They found that the flu patients were hospitalized for an average of six days and were charged an average of $987 in out-of-pocket fees—the total sum of copays, deductibles, and coinsurance.

That number increased with the length of stay and intensity of treatment. In other words, patients who spent more time in the hospital and required more sophisticated care—such as that offered in the intensive care unit—tended to owe more money. Roughly 3% of patients—about 423—were charged more than $2,500 in out-of-pocket fees, and 0.3%—about 49—were charged more than $4,000.

Kao-Ping Chua, MD, PhDWe should not penalize people for getting sick.

Kao-Ping Chua, MD, PhD

We should not penalize people for getting sick.

“In our paper, each additional day of hospitalization was associated with $53 higher out-of-pocket spending for patients," Chua says. “If Medicare Advantage patients with COVID-19 are hospitalized for more days on average than patients in our study, we would expect their out-of-pocket spending to be higher, assuming cost-sharing waivers from insurers expired.”

Chua and Conti also found that each additional day of an ICU stay was associated with a $63 increase in out-of-pocket spending. However, Chua says that it is “hard to estimate how much this percentage would increase” for patients with COVID-19 “without knowing specific details about hospitalization benefits and resource utilization among patients hospitalized for COVID-19.”

Even a few nights in the ICU would be prohibitively expensive for many, if not a majority. In 2018, 40% of Americans reported that they did not have an extra $400 on hand in case of emergencies, let alone an extra $987 or $2,500.

Such statistics, the researchers write, only underscore the critical importance of extending or implementing cost-sharing waivers for COVID-19 treatment. They call on the federal government to take action on this issue. With President Joe Biden’s change in administration, Chua says, “prospects for a federal mandate may be better.”

How To Get Help Paying for High Charges

“Healthcare providers who have conducted COVID-19 testing or provided treatment for uninsured individuals with a COVID-19 primary diagnosis on or after February 4, 2020 can request claims reimbursement through the program electronically and will be reimbursed generally at Medicare rates, subject to available funding,” according to the Health Resources and Services Administration.

COVID-19 and Your Health Insurance

If you are insured and are experiencing some of these out-of-pocket costs, consider reviewing your medical bill for any discrepancies. FAIR Health recommends looking for overcharges, double-billing, and incorrect dates of service.If you believe there are errors in the bill it’s always best to contact the hospital. And if each procedure or service isn’t listed separately, ask for an itemized bill.

The information in this article is current as of the date listed, which means newer information may be available when you read this. For the most recent updates on COVID-19, visit ourcoronavirus news page.

6 SourcesVerywell Health uses only high-quality sources, including peer-reviewed studies, to support the facts within our articles. Read oureditorial processto learn more about how we fact-check and keep our content accurate, reliable, and trustworthy.Chua K, Conti R.Out-of-pocket spending for influenza hospitalizations in Medicare Advantage.American Journal of Preventive Medicine. doi:10.1016/j.amepre.2020.11.004Sun LH, Bever L.This flu season has now reached pandemic levels (but it’s not technically a pandemic. Washington Post.Michigan Medicine—University of Michigan.As insurers end grace period for COVID-19 hospital costs, study estimates potential bills.EurekAlert!Chua K, Conti R.Despite the Families First Coronavirus Response Act, COVID-19 evaluation is not necessarily free.Health Affairs.Health Resources and Services Administration.COVID-19 claims reimbursement to health care providers and facilities for testing, treatment, and vaccine administration for the uninsured.FAIR Health.How to review your medical bill.

6 Sources

Verywell Health uses only high-quality sources, including peer-reviewed studies, to support the facts within our articles. Read oureditorial processto learn more about how we fact-check and keep our content accurate, reliable, and trustworthy.Chua K, Conti R.Out-of-pocket spending for influenza hospitalizations in Medicare Advantage.American Journal of Preventive Medicine. doi:10.1016/j.amepre.2020.11.004Sun LH, Bever L.This flu season has now reached pandemic levels (but it’s not technically a pandemic. Washington Post.Michigan Medicine—University of Michigan.As insurers end grace period for COVID-19 hospital costs, study estimates potential bills.EurekAlert!Chua K, Conti R.Despite the Families First Coronavirus Response Act, COVID-19 evaluation is not necessarily free.Health Affairs.Health Resources and Services Administration.COVID-19 claims reimbursement to health care providers and facilities for testing, treatment, and vaccine administration for the uninsured.FAIR Health.How to review your medical bill.

Verywell Health uses only high-quality sources, including peer-reviewed studies, to support the facts within our articles. Read oureditorial processto learn more about how we fact-check and keep our content accurate, reliable, and trustworthy.

Chua K, Conti R.Out-of-pocket spending for influenza hospitalizations in Medicare Advantage.American Journal of Preventive Medicine. doi:10.1016/j.amepre.2020.11.004Sun LH, Bever L.This flu season has now reached pandemic levels (but it’s not technically a pandemic. Washington Post.Michigan Medicine—University of Michigan.As insurers end grace period for COVID-19 hospital costs, study estimates potential bills.EurekAlert!Chua K, Conti R.Despite the Families First Coronavirus Response Act, COVID-19 evaluation is not necessarily free.Health Affairs.Health Resources and Services Administration.COVID-19 claims reimbursement to health care providers and facilities for testing, treatment, and vaccine administration for the uninsured.FAIR Health.How to review your medical bill.

Chua K, Conti R.Out-of-pocket spending for influenza hospitalizations in Medicare Advantage.American Journal of Preventive Medicine. doi:10.1016/j.amepre.2020.11.004

Sun LH, Bever L.This flu season has now reached pandemic levels (but it’s not technically a pandemic. Washington Post.

Michigan Medicine—University of Michigan.As insurers end grace period for COVID-19 hospital costs, study estimates potential bills.EurekAlert!

Chua K, Conti R.Despite the Families First Coronavirus Response Act, COVID-19 evaluation is not necessarily free.Health Affairs.

Health Resources and Services Administration.COVID-19 claims reimbursement to health care providers and facilities for testing, treatment, and vaccine administration for the uninsured.

FAIR Health.How to review your medical bill.

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