Pedestrians walk passed signage at Cigna headquarters in Bloomfield, Connecticut.

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Health insurers Cigna and Humana are now waiving patient cost-sharing on all treatment for coronavirus, including hospitalizations and ambulance transfers, for their insured members and employer plans.

“Our customers with COVID-19 should focus on fighting this virus and preventing its spread,” said David Cordani, Cigna president and CEO in a statement, adding “while our customers focus on regaining their health, we have their backs.”

The insurers said the waiver applies to all medical costs related to the treatment of coronavirus, including FDA-approved medications and vaccines when they become available. They will apply to their privately insured individual and groups plans, Medicare Advantage and Medicaid members.

“We’re taking this significant action to help ease the burden on seniors and others who are struggling right now. No American should be concerned about the cost of care when being treated for coronavirus,” said Bruce Broussard, president and CEO of Humana.

Last week, CVS Health’s Aetna division became the first major carrier to waive cost-sharing on Covid-19 hospitalization at its in-network health systems.

Both Humana and Cigna pledge to cover members’ cost-sharing responsibilities for both in-network and out-of-network Covid-19 services, and to work with federal authorities to make sure that patients do not receive surprise out-of-network bills for treatment.

The $2 trillion CARES Act passed last week requires the industry to provide first-dollar coverage for testing, emergency room care and for future vaccines. Most of the major insurers and regional Blue Cross providers followed Cigna in waiving cost-sharing on testing and diagnosis on a national level by early March. The health insurers have also waived prior authorization requirements for Covid-19 testing and treatments, as well as hospital transfers to post-acute care facilities during the epidemic, in order to reduce regulatory burdens on doctors and hospitals.

The question of waiving cost-sharing on coronavirus hospitalization costs, in addition to testing, came into focus on March 11 when President Donald Trump inadvertently declared that the insurers would be doing both during an Oval Office address.

With three of the major carriers now committing to waive essentially all patient out-of-pocket costs for Covid-19, more insurers are likely follow. But they will do so not knowing just how big the costs will get.

Covid-19 medical costs could near $95 billion

In early March, credit analysts at S&P Global estimated that health insurers collectively could face nearly $95 billion in medical costs from a severe national coronavirus pandemic, assuming up to 30% of their privately insured members tested positive for Covid-19.

S&P Global analysts calculated that hospitalization costs for patients requiring care in an intenvise car unit could top $20,000 for patients under 65 on private health insurance plans, and more than $12,000 for Medicare patients requiring ICU care. However, those models are based partly on costs for intense flu-season pneumonia hospitalizations.

During one briefing this week, New York Governor Andrew Cuomo said that Covid-19 patients in the state have needed an average of 21 days of on a ventilator — a much longer stay than typical hospitalizations needing ventilator assistance.

Financial impact on insurers and employers

Insurers likely have a better idea of how much coronavirus ICU treatments cost, from the growing number of hospitalizations in states like New York and Washington. Yet, they can’t begin to calculate just how widespread the severity of the epidemic will be.

CVS Health warned in a regulatory filing last week “at this time we cannot reasonably estimate the adverse impact COVID-19,” while adding “the adverse impact could be material.”

While the insurers will pick up the tab for their own plans, large self-insured employers are the ones who actually foot the bills for their workers’ coverage and determine cost-sharing provisions.

When the insurers instituted cost-sharing waivers in early March, they gave self-insured employers the ability to opt in to the program. Some employers hesitated, until they got clearance from the Internal Revenue Service about high-deductible plans. This month, federal tax officials said that out-of-pocket waivers on testing would not jeopardize tax treatments for high-deductible plan health savings accounts.

This time, Cigna, Humana and Aetna are automatically extending the cost-sharing waiver for coronavirus treatment to self-employed plans as well, giving them the ability to opt out. The expectation is that the IRS could also extend the high-deductible health plan tax ruling for coronavirus treatments.

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