This Health Insurance Freebie Is Disappearing Fast

A widely available health insurance freebie is starting to disappear.

During the past year, health insurance companies typically have waived deductibles, co-payments and other costs for treatment and doctor and hospital visits related to COVID-19, the disease caused by the coronavirus.

Last November, a study found that 88% of people covered by insurance plans had policies that waived payments related to COVID-19 treatment at some point during the pandemic.

But late last year, health insurers began rolling back those perks, and the trend has picked up steam in 2021, according to a Kaiser Health News report.

For example, KHN reports that:

• UnitedHealth started to roll back COVID-19 waivers last fall and completed the process in March.
• Anthem stopped providing COVID-19 waivers at the end of January.
• Aetna ended deductible-free inpatient treatment for COVID-19 on Feb. 28.

Fortunately, some services still are gratis. For example, you do not have to pay for COVID-19 vaccinations or more COVID-19 tests, as federal law mandates that insurers must waive these costs.

Ironically, last year’s widespread policy of waiving the cost of COVID-19 care could actually end up hurting the pocketbooks of many consumers who pay for health insurance.

KHN points out that as part of the Affordable Care Act of 2010, insurers must spend at least 80% — and for large group plans, 85% — of their premium revenue on direct health care, rather than on marketing and administration.

Insurance companies that do not meet this requirement must issue rebates by Aug. 1 to individuals or employers who purchase coverage.

Waiving the fees associated with COVID-19 care boosted insurance company spending, which may have “offset some share of what are expected to be hefty rebates this summer,” KHN reports.

So, for some consumers, the widespread trend among insurance companies of waiving costs related to COVID-19 care might turn out to be a net financial negative.

As Cynthia Cox, a vice president at the nonprofit Kaiser Family Foundation and director for its program on the Affordable Care Act, told KHN:

“If they completely offset the rebates through waiving cost sharing, then it strictly benefits only those with COVID who needed significant treatment. But, if they issue rebates, there’s more broad distribution.”

How to save more on health care

Looking for more ways to cut your health care costs? Consider opening a health savings account.

There are few tax breaks as generous as an HSA. You can take a deduction for your contributions, the money grows tax-free, and you won’t owe taxes when you withdraw it if you spend it on qualified medical expenses.

In short, you will never owe taxes on this money in most cases.

To be eligible for an HSA, you must have a high-deductible health insurance plan and otherwise qualify.

You will also have to choose an HSA provider, such as Money Talks News partner Lively. MTN contributor Miranda Marquit talks about her experience with Lively in “3 Ways a Health Savings Account Can Improve Your Finances.”