The True Cost of ‘Free’ COVID At-Home Tests

By Damon Darlin | KHN

Americans continue to hear that it is important to regularly check for COVID-19 at home. But just try to find a quick “at-home” COVID test in a store and at the right price for routine testing.

Testing, like wearing masks, is an important measure if the country hopes to beat COVID, restore normalcy, and get the economy working. To help Americans get cheaper tests, the federal government now plans to require insurance companies to pay for them.

The Biden Administration announced January 10 that everyone with private insurance can be fully insured eight quick tests a month. You can purchase one at no out-of-pocket cost from retail pharmacies that are part of the insurance company’s network, or buy it at any store and have it reimbursed by the insurance company.

Congress said private insurers must cover all COVID testing and any related medical services when it passed the Families Coronavirus Response Act and the CARES Act. The pay-for-insurance solution has been used frequently through the pandemic. Insurers have been required to pay for PCR tests, COVID treatments, and vaccine administration. (Taxpayers are paying for the vaccine themselves.) It seems an elegant solution for a politician because it looks free and doesn’t use taxpayer money.

Frederic J. Brown / Getty

Are the tests really free?

Oh no. As many economists will tell you, there is no such thing as a free lunch. Someone has to select the tab. Initially, insurance companies bear the cost. Cynthia Cox, a KFF vice president who studies the Affordable Care Act and private insurers, said the total bill could run into the billions. Exactly how much depends on “how easy it is to get them and how much will be reimbursed,” she said.

Will the insurance company swallow those imposed costs?

If companies draw from the books of the time-tested insurance giants, they will pass those costs on to customers. “This will put upward pressure on premiums,” said Emily Gee, vice president and coordinator of health policy at the Center for American Progress.

Major insurers such as Cigna, Anthem, UnitedHealthcare and Aetna did not respond to requests to discuss the matter.

If that’s the case, why haven’t I been paid higher premiums yet?

Last year, insurance companies had the opportunity to increase premiums but they mostly didn’t.

Why? Perhaps because insurance companies have made so much money during the pandemic so far that they don’t need it. For example, industry profits in 2020 jumped 41% to $31 billion from $22 billion, according to the National Association of Insurance Commissioners. The NAIC said the industry has continued its “extraordinary growth trend” that began prior to the arrival of COVID. The companies will report their 2021 results soon.

The reason behind these returns is clear. You’re paying premiums based on the predictions your insurance company makes about how much health care a consumer will use that year. Because people stay home, have fewer accidents, postpone surgery, and generally avoid going to the doctor or hospital, insurance companies pay less. They refund a portion of their earnings to customers, but they pocket a lot more.

As companies’ accounts work to project spending in 2023, premiums could increase if they foresee more claims and costs. Paying for millions of quick tests is something they will include in their calculations.

Frederic J. Brown / Getty

Regardless of my premium, will the tests cost me directly?

It is completely possible. If your insurance company doesn’t have an agreement with a retailer where you can simply pick up your allotted tests, you’ll have to pay for them — whatever the store’s price. fabricate. If that’s the case, you’ll need to fill out a form to claim the insurance company. How many times have you lost your receipt or simply neglected to send the mail to get a discount on your purchase? A lot, right?

Here’s another thing: The refund is set at $12 per test. If you pay $30 for an exam—and that’s not unheard of—your insurance company will only accept $12. You eat $18.

And by the way, people on Medicare will have to pay for their tests themselves. People with Medicaid-covered health care can get free testing kits at community centers.

Some of the free tests are supposed to go to Americans’ homes through the US Postal Service. And the Biden administration revealed a website where Americans can request free tests from the cache of a billion that the federal government has requested.

Does this help reduce the cost of home tests and make them easier to find?

Free COVID tests aren’t likely to have much immediate impact on overall cost and availability. You will still need to look for them. Federal measures will likely stimulate demand for tests, which in the short term could make them harder to find.

However, demand and some government guarantees for manufacturers may prompt manufacturers to test production faster. Increased competition and supply could theoretically lower prices. Analysts estimate that there is still room for prices to fall because the wholesale cost of the test is between $5 and $7. “It’s a big step in the right direction,” Gee said.

KHN (Kaiser Health News) is a national newsroom specializing in the production of in-depth coverage of health issues. Along with Policy Analysis and Exploration, KHN is one of the three main activities in KFF (Kaiser Family Foundation). The KFF is a nonprofit organization privileged to provide information on health issues to the nation.