Surprise Federal Drug Rule Directs Insurers to Reveal What They Pay for Prescription Drugs

Health insurance companies will have to give their customers estimated out-of-pocket costs for prescription drugs and disclose to the public the negotiated prices they pay for drugs, under an unexpected new Trump administration rule.

The administration said those requirements, part of a broader rule issued Oct. 29 forcing health plans to disclose costs and payments for most health care services, will promote competition and empower consumers to make better medical decisions.

The new rule does not, however, apply to Medicare or Medicaid.

The drug price provisions, which would not begin until 2022, were a surprise because they were not included in the original proposed rule issued in 2019.

It’s the departing Trump administration’s most ambitious effort to illuminate the complex, secret and lucrative system of prescription drug pricing, in which health plans, drug manufacturers and pharmacy benefit management firms agree on prices. The administration and Congress have tried and failed to reform part of that system — the rebates paid by drugmakers to the pharmacy benefit managers to get their products onto insurance plan formularies. Those payments, which some call kickbacks, are widely blamed for driving up costs to patients.

Patient advocates and policy experts, while generally supportive of the administration’s transparency concept, are divided on the cost-saving value of the new rule. Many say Congress needs to take broader action to curb drug prices and cap patient costs. Groups representing drugmakers, pharmacy benefit managers and commercial health plans have denounced the initiative, saying it will damage market competition and raise drug prices.

Advocates say the new rule will help patients in private health plans, including employer-based plans, and their physicians choose less expensive medications. It may even enable health plans to buy drugs more cheaply for their members. Three in 10 Americans say they have opted not to use a prescribed drug as directed because of the high cost, according to a KFF survey last year. (KHN is an editorially independent program of KFF.)

Under the new federal rule, starting in 2024 an insurance plan member can request and receive estimates of out-of-pocket costs for prescription drugs, both online and on paper, taking into account the member’s deductible, coinsurance and copays. Insurers say most plans already offer such cost-estimator tools.

Helping patients find drugs that cost them less could boost their compliance in taking needed medicines, thus improving their health.

“You can call your insurer now and ask what your copay is,” said Wendy Netter Epstein, a health law and policy professor at DePaul University in Chicago. “Patients often don’t do that. Whether or not this has an impact depends on whether patients take the initiative to obtain this information.”

Starting in 2022 under the new rule, private plans also will have to publish the prices they negotiated with drug companies and benefit management companies online in a digital, machine-readable format. That may be particularly helpful to employers that provide health insurance to workers, enabling them to seek the lowest price the drug manufacturer is offering to other purchasers.

The rule will not require plans to disclose rebates and other discounts they negotiate with drugmakers and pharmacy benefit managers.

That’s a disappointment to employers that provide health insurance for their workers. “We’d like a much clearer idea of how much we’re paying for every drug every time it’s dispensed,” said James Gelfand, senior vice president for health policy at the ERISA Industry Committee, which represents large self-insured employers. “We want to know where every cent in rebates and discounts is going. We’ll at least begin peeling back the onion. You have to start somewhere.”

But other experts argue the rule will do little to make medications more affordable. Indeed, they warn that publishing what health plans pay drug manufacturers could crimp some plans’ ability to get price concessions, raising the premiums and drug prices that plan members pay. That’s because manufacturers won’t want to give those discounts knowing other health plans and pharmacy benefit managers will see the published rates and ask for the same deals.

“Insurers and pharmacy benefit managers currently use rebates that are hidden from view to drive prices lower,” said Dr. Aaron Kesselheim, a professor of medicine at Harvard University who studies prescription drug policy. “If you make that transparent, you kind of reduce the main strategy payers have to lower drug prices.”

Patient advocates also questioned how useful the published rates will be for patients, because plans don’t have to post list prices, on which patient cost-sharing amounts are based. There also are practical limits to patients’ ability to price-shop for drugs, considering there may be only one effective drug for a given medical condition, such as many types of cancers.

Still, if the public knows more about how much health plans pay for drugs — and can estimate the size of the rebates and discounts that aren’t being passed on to patients — that could heighten pressure on federal and state elected officials to tackle the thorny issues of high prices and gaps in insurers’ drug coverage, which powerful industry groups oppose.

“If the information is presented to consumers so they realize they are paying a higher price without the benefit of the rebates, you’ll get a lot of angry consumers,” said Niall Brennan, CEO of the Health Care Cost Institute, a nonprofit group that publishes cost data.

The Biden administration is expected to keep the new price disclosure rule for health plans. In July, the Biden campaign issued a joint policy statement with Sen. Bernie Sanders (I-Vt.) favoring increased price transparency in health care.

But Kesselheim and other experts say Congress needs to consider stronger measures than price transparency to address drug affordability. These include letting the federal government negotiate prices with drugmakers, limiting the initial price of new drugs, capping price increases and establishing an impartial review process for evaluating the clinical value of drugs relative to their cost. Those are policies Biden has said he supports.

“There’s a limit to what transparency can do,” said Shawn Gremminger, health policy director at the Pacific Business Group on Health, which represents large self-insured employers. “That’s why we’re increasingly comfortable with policies that get at the underlying prices of drugs.” As an example, he cited the Trump administration’s proposal to tie what Medicare pays for drugs to lower prices in other countries.

Commercial insurers, drug manufacturers and pharmacy benefit managers are strongly opposed to the drug transparency rule. “This rule will disrupt the marketplace dynamics and undermine the highly competitive negotiations that kept net prices for brand medicines at a growth rate of just 1.7% in 2019,” said Katie Koziara, a spokesperson for the Pharmaceutical Research and Manufacturers of America. She wouldn’t say whether her group would sue to block the rule.

The survival of the rule, which draws its legal authority from the Affordable Care Act, also depends on the U.S. Supreme Court upholding the constitutionality of that law in a case argued on Nov. 10.

This article is part of a series on the impact of high prescription drug costs on consumers made possible through the 2020 West Health and Families USA Media Fellowship.

Kaiser Health News (KHN) is a national health policy news service. It is an editorially independent program of the Henry J. Kaiser Family Foundation which is not affiliated with Kaiser Permanente.


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COVID + Influenza: éste es un buen año para vacunarse, aconsejan expertos

La temporada de influenza se verá diferente este año, ya que los Estados Unidos se enfrentan a una pandemia de coronavirus que ya ha matado a más de 176.000 personas.

Muchos estadounidenses son reacios a ir al médico y los funcionarios de salud pública temen que las personas eviten vacunarse.

Aunque a veces se considera incorrectamente como un resfriado, la gripe también mata a decenas de miles de personas en el país cada año. Los más vulnerables son los niños pequeños, los adultos mayores y las personas con enfermedades subyacentes. Cuando se combina con los efectos de COVID-19, los expertos en salud pública dicen que es más importante que nunca vacunarse contra la gripe.

Si una cantidad suficiente de la población se vacuna, más del 45% lo hizo la temporada de gripe pasada, podría ayudar a evitar un escenario de pesadilla este invierno, con hospitales llenos de pacientes con COVID-19 y los que sufren los efectos graves de la influenza.

Además de la posible carga para los hospitales, existe la posibilidad de que las personas contraigan ambos virus y “nadie sabe qué sucede si se contrae influenza y COVID simultáneamente porque nunca sucedió antes”, dijo la doctora Rachel Levine, secretaria de Salud de Pennsylvania, a reporteros.

En respuesta, este año los fabricantes están produciendo más suministros de vacunas, entre 194 y 198 millones de dosis, unas 20 millones más de las que se distribuyeron la temporada pasada, según los Centros para el Control y Prevención de Enfermedades (CDC).

Mientras se acerca la temporada de gripe, aquí hay algunas respuestas a preguntas frecuentes:

P: ¿Cuándo debo vacunarme contra la gripe?

La publicidad ya ha comenzado y algunas farmacias y clínicas ya tienen sus suministros. Pero, debido a que la efectividad de la vacuna puede disminuir con el tiempo, los CDC recomiendan no recibir la dosis en agosto.

Muchas farmacias y clínicas comenzarán las inmunizaciones a principios de septiembre. Generalmente, los virus de la influenza comienzan a circular a mediados o fines de octubre, pero se expanden masivamente más tarde, en el invierno. Se necesitan aproximadamente dos semanas después de recibir la inyección para que los anticuerpos, que circulan en la sangre y frustran las infecciones, se acumulen.

“Las personas jóvenes y sanas pueden comenzar a vacunarse contra la gripe en septiembre, y las personas mayores y otras poblaciones vulnerables pueden hacerlo en octubre”, dijo el doctor Steve Miller, director clínico de la aseguradora Cigna.

Los CDC recomiendan que las personas “se vacunen contra la influenza a fines de octubre”, pero señalaron que se puede recibir la vacuna más tarde porque “aún puede ser beneficiosas y la vacunación debe ofrecerse a lo largo de toda la temporada de influenza”.

Aun así, algunos expertos recomiendan no esperar demasiado este año, no solo por COVID-19, sino también en caso de que haya escasez debido a la abrumadora demanda.

P: ¿Cuáles son las razones por las que las que debería ofrecer mi brazo para vacunarme?

Hay que vacunarse porque brinda protección contra la gripe y, por lo tanto, contra la propagación a otras personas, lo que puede ayudar a disminuir la carga para los hospitales y el personal médico.

Y hay otro mensaje que puede resonar en estos tiempos extraños.

“Le da a la gente la sensación de que hay algunas cosas que pueden controlar”, dijo Eduardo Sánchez, director médico de prevención de la American Heart Association.

Si bien una vacuna contra la gripe no evitará COVID-19, recibirla podría ayudar al médico a diferenciar entre las dos enfermedades si se desarrolla algún síntoma (fiebre, tos, dolor de garganta) que ambas infecciones comparten, explicó Sánchez.

Y aunque las vacunas contra la gripe no evitarán todos los casos de gripe, vacunarse puede reducir la gravedad si la persona se enferma, dijo.

Todas las personas elegibles, especialmente los trabajadores esenciales, los que sufren de afecciones subyacentes y aquellos en mayor riesgo, incluidos los niños muy pequeños y las mujeres embarazadas, deben buscar protección, dijeron los CDC. La entidad recomienda la vacunación a partir de los 6 meses.

P: ¿Qué sabemos sobre la efectividad de la vacuna de este año?

Se deben producir nuevas vacunas contra la gripe cada año, porque el virus muta y la efectividad de la vacuna varía, dependiendo de qué tan bien coincida con el virus circulante.

Se calculó que la formulación del año pasado tuvo una eficacia de aproximadamente un 45% para prevenir la gripe en general, con una efectividad de aproximadamente un 55% en los niños. Las vacunas disponibles en el país este año tienen como objetivo prevenir al menos tres cepas diferentes del virus, y la mayoría cubre cuatro.

Todavía no se sabe qué tan bien coincidirá el suministro de este año con las cepas que circularán en los Estados Unidos. Las primeras indicaciones del hemisferio sur, que atraviesa su temporada de gripe durante nuestro verano, son alentadoras. Allí, las personas practicaron el distanciamiento social, usaron máscaras y se vacunaron en mayor número este año, y los niveles mundiales de gripe son más bajos de lo esperado. Sin embargo, expertos advierten que no se debe contar con una temporada igual de suave en los Estados Unidos, en parte porque los esfuerzos por usar mascara facial y de distanciamiento social varían ampliamente.

P: ¿Qué están haciendo diferente los seguros y sistemas de salud este año?

Las aseguradoras y los sistemas de salud contactados por KHN dicen que seguirán las pautas de los CDC, que exigen limitar y espaciar la cantidad de personas que esperan en las filas y las áreas de vacunación. Algunos están programando citas para vacunas contra la gripe para ayudar a controlar el flujo.

Health Fitness Concepts, una compañía que trabaja con UnitedHealth Group y otras empresas para establecer clínicas de vacunación contra la gripe en el noreste del país, dijo que está “fomentando eventos más pequeños y frecuentes para apoyar el distanciamiento social” y “exigiendo que se completen todos los formularios y arremangarse las camisas antes de entrar al área de vacunación contra la influenza”.

Se requerirá que todos usen máscaras.

Además, a nivel nacional, algunos grupos médicos contratados por UnitedHealth instalarán carpas, para que las inyecciones se puedan administrar al aire libre, dijo un vocero.

Kaiser Permanente planifica las vacunas directamente en autos en algunos de sus centros médicos y está probando los procedimientos de detección y registro sin contacto en algunos lugares.

Geisinger Health, un proveedor de salud regional en Pennsylvania y Nueva Jersey, dijo que también tendría programas de vacunación contra la influenza al aire libre en sus instalaciones.

Además, “Geisinger exige que todos los empleados reciban la vacuna contra la influenza este año”, dijo Mark Shelly, director de prevención y control de infecciones del sistema. “Al dar este paso, esperamos transmitir a nuestros vecinos la importancia de la vacuna contra la influenza para todos”.

P: Por lo general, me vacunan contra la gripe en el trabajo. ¿Seguirá siendo una opción este año?

Con el objetivo de evitar riesgosas reuniones en interiores, muchos empleadores se muestran reacios a patrocinar las clínicas de gripe en oficinas como han ofrecido en años anteriores. Y con tanta gente que sigue trabajando desde casa, hay menos necesidad de llevar las vacunas contra la gripe al lugar de trabajo. En cambio, muchos empleadores están alentando a los trabajadores a que reciban vacunas de sus médicos de atención primaria, en farmacias u otros entornos comunitarios. El seguro generalmente cubrirá el costo de la vacuna.

Algunos empleadores están considerando ofrecer cupones para vacunas contra la gripe a sus trabajadores sin seguro o a aquellos que no participan en el plan médico de la compañía, dijo Julie Stone, directora general de salud y beneficios de Willis Towers Watson, una firma consultora.

Estos cupones podrían, por ejemplo, permitir a los trabajadores obtener la vacuna en un laboratorio en particular sin costo.

Algunos empleadores están comenzando a pensar en cómo podrían usar sus estacionamientos para administrar vacunas contra la gripe enlos autos, dijo el doctor David Zieg, líder de servicios clínicos para el consultor de beneficios Mercer.

Aunque la ley federal permite a los empleadores exigir a los empleados que se vacunen contra la gripe, ese paso generalmente lo toman solo los centros de atención médica y algunas universidades donde las personas viven y trabajan en estrecha colaboración, dijo Zieg.

Pero sucede. El mes pasado, el sistema de la Universidad de California emitió una orden ejecutiva que requiere que todos los estudiantes, profesores y personal se vacunen contra la gripe antes del 1 de noviembre, con limitadas excepciones.

P: ¿Qué están haciendo las farmacias para alentar a las personas a vacunarse contra la gripe?

Algunas farmacias están haciendo un esfuerzo adicional para salir a la comunidad y ofrecer vacunas contra la gripe.

Walgreens, que tiene casi 9,100 farmacias en todo el país, continúa una asociación iniciada en 2015 con organizaciones comunitarias, iglesias y empleadores que ha ofrecido alrededor de 150,000 clínicas de gripe móviles hasta la fecha.

El programa pone especial énfasis en trabajar con poblaciones vulnerables y en áreas desatendidas, dijo el doctor Kevin Ban, director médico de la cadena de farmacias.

Walgreens comenzó a ofrecer vacunas contra la gripe a mediados de agosto y está animando a las personas a no demorar en vacunarse.

Tanto Walgreens como CVS están estimulando a las personas a programar citas y hacer trámites en línea este año para minimizar el tiempo que pasan en los locales.

En los CVS MinuteClinic, una vez que los pacientes se han registrado para recibir la vacuna contra la gripe, deben esperar afuera o en su automóvil, ya que las áreas de espera interiores ahora están cerradas.

“No tenemos un arsenal contra COVID”, dijo Ban, de Walgreens. “Pero quitar la presión del sistema de atención médica proporcionando vacunas por adelantado es algo que sí podemos hacer”.

Kaiser Health News (KHN) is a national health policy news service. It is an editorially independent program of the Henry J. Kaiser Family Foundation which is not affiliated with Kaiser Permanente.


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COVID + Influenza: This Is a Good Year to Get a Flu Shot, Experts Advise

Flu season will look different this year, as the country grapples with a coronavirus pandemic that has killed more than 172,000 people. Many Americans are reluctant to visit a doctor’s office and public health officials worry people will shy away from being immunized.

Although sometimes incorrectly regarded as just another bad cold, flu also kills tens of thousands of people in the U.S. each year, with the very young, the elderly and those with underlying conditions the most vulnerable. When coupled with the effects of COVID-19, public health experts say it’s more important than ever to get a flu shot.

If enough of the U.S. population gets vaccinated — more than the 45% who did last flu season — it could help head off a nightmare scenario in the coming winter of hospitals stuffed with both COVID-19 patients and those suffering from severe effects of influenza.

Aside from the potential burden on hospitals, there’s the possibility people could get both viruses — and “no one knows what happens if you get influenza and COVID [simultaneously] because it’s never happened before,” Dr. Rachel Levine, Pennsylvania’s secretary of health, told reporters this month.

In response, manufacturers are producing more vaccine supply this year, between 194 million and 198 million doses, or about 20 million more than they distributed last season, according to the Centers for Disease Control and Prevention.

As flu season approaches, here are some answers to a few common questions:

Q: When should I get my flu shot?

Advertising has already begun, and some pharmacies and clinics have their supplies now. But, because the effectiveness of the vaccine can wane over time, the CDC recommends against a shot in August.

Many pharmacies and clinics will start immunizations in early September. Generally, influenza viruses start circulating in mid- to late October but become more widespread later, in the winter. It takes about two weeks after getting a shot for antibodies — which circulate in the blood and thwart infections — to build up. “Young, healthy people can begin getting their flu shots in September, and elderly people and other vulnerable populations can begin in October,” said Dr. Steve Miller, chief clinical officer for insurer Cigna.

The CDC has recommended that people “get a flu vaccine by the end of October,” but noted it’s not too late to get one after that because shots “can still be beneficial and vaccination should be offered throughout the flu season.”

Even so, some experts say not to wait too long this year — not only because of COVID-19, but also in case a shortage develops because of overwhelming demand.

Q: What are the reasons I should roll up my sleeve for this?

Get a shot because it protects you from catching the flu and spreading it to others, which may help lessen the burden on hospitals and medical staffs.

And there’s another message that may resonate in this strange time.

“It gives people a sense that there are some things you can control,” said Eduardo Sanchez, chief medical officer for prevention at the American Heart Association.

While a flu shot won’t prevent COVID-19, he said, getting one could help your doctors differentiate between the diseases if you develop any symptoms — fever, cough, sore throat — they share.

And even though flu shots won’t prevent all cases of the flu, getting vaccinated can lessen the severity if you do fall ill, he said.

You cannot get influenza from having a flu vaccine.

All eligible people, especially essential workers, those with underlying conditions and those at higher risk — including very young children and pregnant women — should seek protection, the CDC said. It recommends that children over 6 months old get vaccinated.

Q: What do we know about the effectiveness of this year’s vaccine?

Flu vaccines — which must be developed anew each year because influenza viruses mutate — range in effectiveness annually, depending on how well they match the circulating virus. Last year’s formulation was estimated to be about 45% effective in preventing the flu overall, with about a 55% effectiveness in children. The vaccines available in the U.S. this year are aimed at preventing at least three strains of the virus, and most cover four.

It isn’t yet known how well this year’s supply will match the strains that will circulate in the U.S. Early indications from the Southern Hemisphere, which goes through its flu season during our summer, are encouraging. There, people practiced social distancing, wore masks and got vaccinated in greater numbers this year — and global flu levels are lower than expected. Experts caution, however, not to count on a similarly mild season in the U.S., in part because masking and social distancing efforts vary widely.

Q: What are insurance plans and health systems doing differently this year?

Insurers and health systems contacted by KHN say they will follow CDC guidelines, which call for limiting and spacing out the number of people waiting in lines and vaccination areas. Some are setting appointments for flu shots to help manage the flow.

Health Fitness Concepts, a company that works with UnitedHealth Group and other businesses to set up flu shot clinics in the Northeast, said it is “encouraging smaller, more frequent events to support social distancing” and “requiring all forms to be completed and shirtsleeves rolled up before entering the flu shot area.” Everyone will be required to wear masks.

Also, nationally, some physician groups contracted with UnitedHealth will set up tent areas so shots can be given outdoors, a spokesperson said.

Kaiser Permanente plans drive-thru vaccinations at some of its medical facilities and is testing touch-free screening and check-in procedures at some locations. (KHN is not affiliated with Kaiser Permanente.)

Geisinger Health, a regional health provider in Pennsylvania and New Jersey, said it, too, would have outdoor flu vaccination programs at its facilities.

Additionally, “Geisinger is making it mandatory for all employees to receive the flu vaccine this year,” said Mark Shelly, the system’s director of infection prevention and control. “By taking this step, we hope to convey to our neighbors the importance of the flu vaccine for everyone.”

Q: Usually I get a flu shot at work. Will that be an option this year?

Aiming to avoid risky indoor gatherings, many employers are reluctant to sponsor the on-site flu clinics they’ve offered in years past. And with so many people continuing to work from home, there’s less need to bring flu shots to employees on the job. Instead, many employers are encouraging workers to get shots from their primary care doctors, at pharmacies or in other community settings. Insurance will generally cover the cost of the vaccine.

Some employers are considering offering vouchers for flu shots to their uninsured workers or those who don’t participate in the company plan, said Julie Stone, managing director for health and benefits at Willis Towers Watson, a consulting firm. The vouchers could allow workers to get the shot at a particular lab at no cost, for example.

Some employers are starting to think about how they might use their parking lots for administering drive-thru flu shots, said Dr. David Zieg, clinical services leader for benefits consultant Mercer.

Although federal law allows employers to require employees to get flu shots, that step is typically taken only by health care facilities and some universities where people live and work closely together, Zieg said.

Q: What are pharmacies doing to encourage people to get flu shots?

Some pharmacies are making an extra push to get out into the community to offer flu shots.

Walgreens, which has nearly 9,100 pharmacies nationwide, is continuing a partnership begun in 2015 with community organizations, churches and employers that has offered about 150,000 off-site and mobile flu clinics to date.

The program places a special emphasis on working with vulnerable populations and in underserved areas, said Dr. Kevin Ban, chief medical officer for the drugstore chain.

Walgreens began offering flu shots in mid-August and is encouraging people not to delay getting vaccinated.

Both Walgreens and CVS are encouraging people to schedule appointments and do paperwork online this year to minimize time spent in the stores.

At CVS MinuteClinic locations, once patients have checked in for their flu shot, they must wait outside or in their car, since the indoor waiting areas are now closed.

“We don’t have tons of arrows in our quiver against COVID,” Walgreens’ Ban said. “Taking pressure off the health care system by providing vaccines in advance is one thing we can do.”

Kaiser Health News (KHN) is a national health policy news service. It is an editorially independent program of the Henry J. Kaiser Family Foundation which is not affiliated with Kaiser Permanente.


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Don’t Count on Lower Premiums Despite Pandemic-Driven Boon for Insurers

When COVID-19 smacked the United States in March and April, health plans feared medical costs could skyrocket, jacking up premiums drastically in 2021, when millions of the newly unemployed might still be out of work.

But something else happened: Non-COVID care collapsed as hospitals emptied beds and shut down operating rooms to prepare for an expected onslaught of patients sickened by the coronavirus, while fear of contracting it kept people away from ERs, doctors’ offices and outpatient clinics. In many regions of the country, the onslaught did not come, and the billions of dollars lost by hospitals and physicians constituted huge savings for health plans, fattening their bottom lines.

But that doesn’t mean consumers will see lower premiums next year.

Numerous insurers across the country have announced plans to hike rates next year, though some have proposed cuts.

Peter Lee, executive director of Covered California, appeared skeptical about premium reductions in the state’s Affordable Care Act exchange, which is likely to announce 2021 health plan rates next week.

“Would we like zero increases? Absolutely. Would we like them negative? Yeah — but not if that means you’re going to increase premiums in a year by 20%,” Lee said in an interview with California Healthline this week. “We’ve been leaning on them to do what we always lean on them to do, and this is to have the lowest possible rates where you won’t be on a rate roller coaster. We want health plans to price right — not to price artificially low or artificially high.”

Covered California provides coverage for about 1.5 million residents who buy their own insurance.

If the insurance exchanges in other states offer any guidance for Covered California, it is in the direction of moderate premium increases for 2021, though there is wide variation.

A KFF analysis last week of proposed 2021 rates in the exchanges of 10 states and the District of Columbia showed a median increase of 2.4%, with changes ranging from a hike of 31.8% by a health plan in New Mexico to a cut of 12% in Maryland. (Kaiser Health News, which produces California Healthline, is an editorially independent program of KFF.)

Among the roughly one-third of filings that stated how much COVID-19 added to premiums, the median was 2%, with estimates ranging from minus 1.2% at a plan in Maine to 8.6% at one in Michigan.

The proposed premiums for ACA marketplace plans do not affect job-based coverage, but they may indicate how the pandemic is affecting premiums generally.

The consensus among industry experts is that COVID-19 has generated little pressure for rate rises, and health plans should err on the side of moderation. But some fear that many insurers will hold onto the reserves they’ve built up, citing the possibility of widespread vaccinations and concerns that the care forgone in 2020 could rebound with a vengeance next year.

“The tendency of health plans, when they are faced with any degree of uncertainty, is to be very conservative and price for the worst-case scenario,” said Michael Johnson, an industry observer and critic who worked as an executive at Blue Shield of California from 2003 to 2015. “Actuaries are less likely to get fired if the plan prices too high than if the plan prices too low. But I think regulators really need to push back hard on that.”

Lee said all 11 insurers participating in the exchange this year will remain in 2021, and no new ones will be added to the mix, though some of the current carriers will extend their coverage geographically. Ninety percent of consumers who buy their own health insurance get subsidies from the federal government or the state to help pay their premiums.

In January, California became the first state to offer subsidies to middle-income people who make too much money to qualify for federal subsidies. The lion’s share of the state subsidies is earmarked for those who earn between 400% and 600% of the federal poverty level, or $51,040 to $76,560 a year for an individual and $104,800 to $157,200 for a family of four.

The rate proposals expected to be unveiled next week will be subject to scrutiny by state regulators before they are finalized. Sign-ups for the plans start Nov. 1 and run through Jan. 31. This year, the average Covered California rate increase statewide was 0.8%, the lowest since the exchange started providing coverage in 2014.

The benefits reaped by health plans so far in the pandemic can be seen in strong second-quarter earnings and reduced spending on care. UnitedHealth Group, the nation’s largest health insurer, announced earlier this month that its net profit in the April-June quarter nearly doubled from the same period a year earlier. Its medical spending plummeted from 83.1% of premium revenue to 70.2% over that period.

Anthem, the parent company of Blue Cross of California, reported Wednesday that its net profit in the second quarter doubled from the same period in 2019, also on the back of plunging medical expenses.

Anthem said it offered one-month premium credits ranging from 10% to 50% to enrollees in individual, employer and group dental policies — including its Blue Cross plans in California.

UnitedHealth said it has provided $1.5 billion worth of financial support to consumers so far, including premium credits and cost-sharing waivers, and expects to pay out $1 billion in rebates.

But UnitedHealth, which does not participate in Covered California, is seeking a rate increase of 13.8% in the New York exchange. Anthem, which covers about 80,000 people in Covered California, is planning rate hikes of 16.6% in Kentucky and 9.9% in Connecticut.

On the other hand, Kaiser Permanente, which covers more than one-third of Covered California enrollees, plans rate cuts in other states, ranging from 1% in Hawaii to 11% in Maryland. (Kaiser Health News, which produces California Healthline, is not affiliated with Kaiser Permanente.)

Lee downplayed the notion of a financial boon for California health plans, saying that, partly because of the use of telehealth, primary care has rebounded and the plans are paying for it. “So we don’t see this as being at this point a bonanza year for health plans,” he said. “Rather, it’s a year in which there are lessons learned for how we can deliver care in a pandemic.”

Still, the health plans are in a far stronger position than they had feared earlier this year.

In March, Covered California released a study showing that COVID-19’s impact on 2021 premiums for individuals and employers could range from an increase of 4% to more than 40%. But less than three months later, projections commissioned by the industry’s national advocacy group, America’s Health Insurance Plans, showed that even in the worst-case scenario of a 60% COVID infection rate — far above where it stands now — the pandemic would increase medical costs in 2020 and 2021 by 6% at most, and could even decrease them.

That moderate effect is largely attributable to what Katherine Hempstead, a senior policy adviser at the Robert Wood Johnson Foundation, called “a kind of yin and yang: If you have a lot of COVID, you don’t have a lot of other health care spending.”

Independent of the course the pandemic takes, emergency room and outpatient visits still lag behind pre-COVID levels and will probably continue to do so next year, to the continued benefit of insurers, predicted Glenn Melnick, a professor of health care finance at the University of Southern California’s Sol Price School of Public Policy. That could be good news for consumers, he said, potentially leading to lower premium increases or even reductions next year.

On the other hand, hospitals and doctors have lost money, and the ones whose contracts with health plans are up for renewal will be looking to make up those losses, Melnick said.

“Providers could be asking for 20-25% increases next year,” he said, “and if they’ve got market power, they can make it stick.”

This KHN story first published on California Healthline, a service of the California Health Care Foundation.

Kaiser Health News (KHN) is a national health policy news service. It is an editorially independent program of the Henry J. Kaiser Family Foundation which is not affiliated with Kaiser Permanente.

For COVID Tests, the Question of Who Pays Comes Down to Interpretation

In advance of an upcoming road trip with her elderly parents, Wendy Epstein’s physician agreed it would be “prudent” for her and her kids to get tested for COVID-19.

Seeing the tests as a “medical need,” the doctor said insurance would likely pay for them, with no out-of-pocket cost to Epstein. But her children’s pediatrician said the test would count as a screening test — since the children were not showing symptoms — and she would probably have to foot the bill herself.

It made no sense. “That’s two different responses for the exact same scenario,” said Epstein, a health law professor at DePaul University in Chicago, who deferred the tests as she clarified the options.

Early on in the coronavirus pandemic — when scarce COVID testing was limited to those with serious symptoms or serious exposure — the government and insurers vowed that tests would be dispensed for free (with no copays, deductibles or other out-of-pocket expense) to ensure that those in need had ready access.

Now, those promises are being rolled back in ways that are creating turmoil for consumers, even as testing has become more plentiful and more people — like Epstein — are being advised to get them.

Late last month, the Trump administration issued guidance saying insurers had to waive patient costs only for “medically appropriate” tests “primarily intended for individualized diagnosis or treatment of COVID-19.” It made clear that insurers do not have to fully waive cost sharing for screening tests, even when required for employees returning to work or for assisting in public health surveillance efforts.

Left unclear are situations like that faced by Epstein — and others who seek a test to clear a child for summer camp or day care. Public health officials have been unanimous in the opinion that widespread, readily available testing is crucial for getting businesses and schools open again, and society back on its feet.

But who should bear the costs of that testing — or a share of them — is an unresolved question.

Who pays when all employees are required to have a negative COVID test in order to return to work? Or if a factory tests workers every two weeks? Or just because someone wants to know for their own peace of mind?

The questions may be compounded in some cities and states where tests are widely available at clinics or drive-thru centers. In New York, CityMD clinics bill insurers $300 for the service, according to an explanation-of-benefits document given to KHN by a patient. The related charge from the lab that processed the test, according to the same patient’s insurance statement, was $55. Most patients don’t have to pay a share of those amounts.

The clinic has a partnership with the city allowing anyone who wants a test for the virus to get one. Still, no test is truly free, as labs bill insurers or submit for reimbursement from government programs.

Until a recent spike in virus cases created long delays in many areas, some other regions also took a test-everyone-who-wants-a-test approach. While that is one way to get a picture of where the virus is spreading, it can also become a cash cow providing income to clinics and labs, as residents seek multiple “free” tests after each potential exposure.

In an email, a spokesperson for CityMD would not say how much the clinic is reimbursed for testing. The clinics do not bill for lab testing, she wrote, referring questions about those costs to the laboratories that process them.

Insurers will be making judgment calls — likely on a case-by-case basis — about how they will handle cost sharing for screening tests under the new Trump administration guidance.

What is clear: Insurers have argued against requirements that they waive all cost sharing for workplace COVID testing, noting they don’t do that for other screening efforts, such as drug-testing programs. For now, insurers will “continue to pay for tests recommended by a doctor,” Kristine Grow, spokesperson for AHIP, an industry group, wrote in an email to KHN.

But AHIP also sent a clear signal that it would not embrace cost sharing waivers for workplace or public health screening efforts. Earlier this month, the organization lobbied federal lawmakers to include funding in the next stimulus package for public health surveillance and workplace testing programs — a cost estimated between $6 billion and $25 billion annually in an earlier study commissioned by the group.

The Evolving Rules for Free Testing

The coronavirus relief legislation passed by Congress in March, and April guidance from the Trump administration implementing it, agreed that patients should not be burdened with payments for COVID testing and treatment that is “medically appropriate.”

But as the pandemic has evolved and grown, the definition of that term has both broadened and become fuzzier.

The Centers for Disease Control and Prevention says testing is appropriate for people who fall into five broad categories, including those with suspected exposure and those required to be tested for “purposes of public health surveillance,” which it defines as checking for disease hot spots or trends.

“There’s definitely a disconnect between what public health experts are recommending for testing and how it’s going to be paid for,” said Sabrina Corlette, co-director of the Center on Health Insurance Reforms at Georgetown University.

And tension is mounting among insurers, employers and consumers over who should pay. While insurers say employers should cover the cost for back-to-work testing, many employers are struggling financially and may not be able to do so. At the same time, workers, especially those in lower-wage jobs, also cannot afford out-of-pocket costs for testing, particularly if it is required regularly.

Among those waiting to hear if their insurance will cover the test is Enna Allen of Glencoe, Illinois, who urged her au pair to get a test after the young woman traveled to New Orleans. She had been on a plane, after all, and New Orleans has its share of COVID cases.

“I wanted her to have a test before she returned to work with my kids,” said Allen.

As Allen called around to find a testing site, she explained the test was needed for employment — for someone with no symptoms. After some effort, she found a clinic that, for $275, offered a 15-minute rapid test and said it would accept her au pair’s insurance.

“I’m assuming they [the insurer] will cover it unless I get a bill weeks from now,” said Allen, who said she would pay the bill for her employee if that happens.

There is also a great gray area in deciding who should qualify for free testing after “suspected” exposure. What is suspected exposure? Sharing a small office with an infected co-worker? Participating in a protest? Or simply living in or visiting the Sun Belt, where community spread is accelerating?

“If the au pair went to a clinic and said she was just in New Orleans, and the doctor said that’s enough of a risk to order a test, even though she doesn’t have symptoms, my read of the guidance is the health plan has to cover it 100%,” said Corlette.

Yet a child who’s mainly been sheltering at home who needs a test before being admitted to summer camp probably would not meet the definition.

“That’s a different story because it’s harder to argue there’s been exposure or potential exposure,” said Corlette. “At the end of the day, there’s many ways to interpret the guidance.”

Congressional Democrats have accused the Trump administration in its new guidance of “giving insurance companies loopholes instead of getting people the free testing they need.”

Insurers, patients and politicians have locked horns before when screening tests were billed differently than those same tests for diagnostic purposes, since the boundary is often unclear. Under the Affordable Care Act, for example, colonoscopy screening for cancer is “free,” meaning no patient copayment. But if a polyp is found, doctors sometimes code the procedure as a diagnostic test, which can lead to hundreds or even thousands of dollars in copayments.

While vital, testing is costly — or can be. Medicare reimburses up to $100 for the COVID test. On top of that, there may also be costs associated with the office or clinic visit. And the price is widely variable in the private market, according to a report out last week by KFF, the Kaiser Family Foundation. Prices ranged from $20 to $850 for a single test. (KHN is an editorially independent program of the foundation.)

Media reports have shown tests average $100, but some labs bill insurers for thousands of dollars for each one.

Without a copay, many patients never learn how much their tests actually cost their insurers, which could lead to overuse.

Also, when patients are entirely shielded from the cost, test makers, labs and medical providers are more likely to seek price increases, said Heather Meade, a principal at Washington Council Ernst & Young.

In the end, consumers may still feel a resulting pinch in the form of higher premiums.

Wondering about the sharply different views of her doctors on whether her insurance would fully cover the cost, law professor Epstein called her insurer, which assured her the tests would be covered 100% at in-network providers with no copay or deductible, as long as they were coded correctly. The family will be tested soon, and it appears she’s dodged a financial bullet. But Epstein cautioned in an email: “It’s unclear to me how many insurers will maintain this policy.”

Must-Reads of the Week

While you, loyal reader, wait for a wonderful new permanent Friday Breeze writer to start breezing, welcome to this week’s rundown brought to you from St. Louis by me, Midwest correspondent Lauren Weber.

I’m sadly here to inform you the news is … still bad. So bad, in fact, that “doomscrolling” — the act of not being able to escape your smartphone feed of misery — was examined by The New York Times.

And that’s because all you need to know about the current state of the coronavirus can be aptly summed up in renowned infectious disease reporter Helen Branswell’s latest piece for Stat, titled “How to Fix the Covid-19 Dumpster Fire in the U.S.

The Week’s Latest

But to be more precise: New coronavirus cases in the U.S. shattered a single-day record with over 75,000 Thursday. That number of daily cases has more than doubled since June 24. Deaths from COVID-19 are rising yet again while hot spots across the Sun Belt continue to flare. The Center for Public Integrity uncovered an unreleased federal document saying 18 states are in the “red zone” for COVID-19 cases and should consider stricter protective measures.

And as outbreaks strain lab capacity nationwide, some people are waiting seven or more days to get test results, hobbling potential containment responses. Now, the CDC is urging people to not be retested.

Masks, Schools and Tony Fauci

Mass mask confusion continued to drive the week, with Georgia Gov. Brian Kemp suing Atlanta Mayor Keisha Lance Bottoms over her mandatory mask order. Later, he urged all citizens to wear masks for four weeks — but said he would not support a mandate. Meanwhile, Georgia hospital workers are sounding the alarm and attempting to send patients out of state as hospitals fill up. Across the country, more than half of states have issued mandatory mask orders at this time. And this detailed map of just who is wearing masks in the U.S. is worth your time.

The sharp divide over back-to-school plans for those in public and private school came into focus (private schools have the money to hire their own epidemiologists!), all while Bloomberg reported the percentage of cases of children and teens with COVID-19 is on the rise. The Centers for Disease Control and Prevention postponed releasing further guidance on how students could safely return to school this week. That follows previous complaints from President Donald Trump, who said on Twitter the CDC’s initial recommendations were too tough. Or, as White House press secretary Kayleigh McEnany said Thursday, “The science should not stand in the way of this.”

The big distraction of the week had to be the attacks on the reputation of America’s favorite scientist, Dr. Anthony Fauci, director of the National Institute of Allergy and Infectious Diseases. He withstood a White House attack on his credibility, led by Peter Navarro, Trump’s trade adviser, in an op-ed in USA Today — one that USA Today has since said “did not meet its fact-checking standards.” To his credit, Fauci called to “stop this nonsense” and focus on the coronavirus. For more of a deep dive on the ongoing fireworks, check out this week’s amazing-as-usual episode of KHN’s “What the Health?” podcast. And never forget that Fauci did manage to sneak in this InStyle digital cover with some killer shades and he read a college kid’s thesis on the side during his tenure.

Speaking of op-eds, here’s one worth reading. Larry Hogan, Maryland’s Republican governor, wrote an op-ed about how he felt the Trump administration left his state to fend for itself amid the pandemic. Best part: how he and his wife, who was born and raised in South Korea, were able to secure half a million tests by going outside of the federal response, tapping into her contacts and then protecting them from the feds with the state National Guard.

The disappearance of public data from the CDC website created another firestorm this week. While the data has been restored, it’s another chapter in the saga of tension among the CDC, the administration and public access.

Pocket Change

The insurer UnitedHealthcare posted its most profitable quarter — EVER — proving that, yes, you can get rich during the pandemic. Meanwhile, hospitals face the harsh reality of a surge colliding with their plans to resume profitable elective surgery.

And, no, you won’t be getting on a cruise ship anytime soon — the “no sail” order from the CDC has been extended through September 2020.

Long Reads and Graphics Worth Your Time

Racial inequities in COVID exposure, treatment and care persist at every level, as this piece zeroing in on East St. Louis shows. And this week, over 1,000 employees of the CDC sent a letter to its head calling out systemic racism within the agency.

I still can’t stop thinking about this profile of Lorna Breen, an ER doc who took her own life after becoming overwhelmed not only by the coronavirus crisis but by an exacting medical culture.

These New York Times graphics stress how drug overdose deaths hit a new high in 2019 — many worry the coronavirus is exacerbating their continued rise.

Finally, What’s Abuzz

In case you didn’t have anything else to worry about, mosquitoes are flying into the blind spots of health departments overwhelmed with COVID-19. The CDC is buzzing with concern, as Anna Maria Barry-Jester and I reported yesterday as part of our Underfunded and Under Threat series with the AP.

And for a speed round, these guys tried really hard to hand out free masks at Huntington Beach, California; the inside tale of how a Qatari prince had USC at his beckoning takes many a turn; and you just may have been using hand sanitizer wrong this whole time.

Try to lay off the booze, folks — experts say it’s only supposed to be a drink a day. Also maybe, just maybe, think about staying away from the bars altogether.

If we have a football season — a big IF — here’s what the “mouth shield” helmets would look like.

Plus superhero heartthrob Henry Cavill somehow spent his quarantine staying swole AND learning how to build computers?

But our favorite British superhero might just be Tom Moore, newly knighted by Queen Elizabeth II. The centenarian captured the world’s heart after raising millions for British health care workers by walking laps in his garden with his walker.