If past hospitalizations for pneumonia and other respiratory illnesses are any guide, many Americans could face high out-of-pocket medical costs for COVID-19 hospitalizations, despite the fact that many insurers have waived their cost-sharing requirements, a study from researchers at Johns Hopkins Bloomberg School of Public Health suggests.
For their study, the researchers analyzed out-of-pocket costs for pneumonia and other upper respiratory illness hospitalizations from January 2016 through August 2019 as a potential indicator of likely COVID-19 costs. The researchers found that these out-of-pocket costs were particularly high for so-called consumer-directed health plans—which typically feature lower premiums, compared to standard plans, but higher deductibles that can be paid via tax-advantaged health savings accounts (HSAs).
The findings were published online in the American Journal of Preventive Medicine.
Many big-name health insurers have voluntarily waived out-of-pocket cost sharing for COVID-19 treatment. However, employer-sponsored “self-insured” health insurance plans are not required to adhere to such waivers. Thus, tens of millions of Americans have high-deductible insurance plans that, in cases of COVID-19 hospitalization, may expose them to relatively high out-of-pocket costs.
The researchers found that average out-of-pocket spending for the 2016–2019 study period for these respiratory hospitalizations was $1,961 for patients with consumer-directed plans versus $1,653 for patients in traditional, usually smaller-deductible plans.
The out-of-pocket cost gap was lowest for older patients age 56 to 64, and greatest—$2,237 vs. $1,685—for patients 21 and younger. The analysis was not designed to examine why the cost gap varied inversely with patient age, but one possible explanation proposed by the researchers was that, since younger patients are healthier on average, their hospitalizations may reflect more serious and thus more costly illness.
Given that self-insured plans cannot be regulated at the state level, the researchers suggest that federal policymakers should consider waiving COVID-19 cost sharing for self-insured plan policyholders. They note too that while the likely out-of-pocket costs would be greatest for people enrolled in high-deductible, consumer-directed plans, the findings indicate that people in traditional plans also could face fairly large out-of-pocket costs.
