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Insurers aren't ready to pay for Americans' home COVID-19 tests

How to get reimbursed for COVID tests
How to get reimbursed for COVID tests 05:14

Beginning Saturday, private health insurers will be required to reimburse their members for the cost of over-the-counter COVID-19 tests under new rules laid out by the Biden administration. But Americans are unlikely to get their hands on tests right away.

For one, rapid tests remain in short supply, and pharmacies across the U.S. are sold out in stores and online. Second, many insurers aren't ready to go, saying they haven't had enough time to establish partnerships with retailers or to come up with the necessary operational processes for health plan participants to seek reimbursement for the tests

The Biden Administration only announced the new rules on Monday, sending insurers scrambling to comply with the new requirement by Saturday's deadline.

Program could create "consumer friction"

The Blue Cross Blue Shield (BCBS) Association, a federation of 35 independent health insurance companies that collectively cover one in three Americans, has voiced concern with the COVID-19 test reimbursement program. 

Under the rules, insurance companies are encouraged to offer the tests for free at the point of purchase through a network of so-called preferred retailers. Members can purchase tests elsewhere, but will only be reimbursed at a rate of up to $12 per test. Without such arrangements, insurers have to reimburse members for the full cost of tests purchased outside of a preferred network. 

"We appreciate the [Biden] administration's efforts to address this challenge, including measures to protect against price gouging and abuse," BCBSA CEO Kim Keck said in a statement on Monday. "That being said, we are concerned that the policy does not solve for the limited supply of tests in the country and could cause additional consumer friction as insurers stand up a program in just four days' time."

"A diversity of approaches"

Each Blue Cross Blue Shield company will come up with its own policies and system for members to seek reimbursement for the rapid tests, Kris Haltmeyer, vice president of policy analysis at BCBSA, told CBS MoneyWatch.

"They all may have different pharmacy arrangements and processes for handling claims. You are going to see quite a diversity of approaches health insurers across country use to come into compliance to reimburse tests by this Saturday," he said. 

"The White House guidance didn't describe how direct coverage would occur. All of these negotiations are ongoing," Haltmeyer added of insurance plans' efforts to establish partnerships with pharmacies.

Anthem, a BCBSA company, told CBS MoneyWatch that it is still "reviewing the requirements regarding COVID-19 testing." The insurer is encouraging its members to stay tuned for updates. 

A customer service representative for UnitedHealthcare said she had no information on how consumers will be able to seek reimbursement for tests purchased on or after January 15, or if the insurer had set up a network of preferred retailers. 

"We do not have it figured out yet," the representative said. 

A spokesperson for UnitedHealthcare said the company has no information to share for now on customers will be reimbursed for tests.

Biden to send millions of COVID test kits to ... 02:23

Dr. John Bulger, chief medical officer at Geisinger, a Pennsylvania-based regional health care provider, said the company is using its existing pharmacy network to offer the tests to members for free. He hopes — but doesn't guarantee — that the system will be operational by Saturday.

"We are working full-time to have things buttoned up, but our guidance to members is if for whatever reason you can't get it for free, keep your receipt," Bulger said. "But our goal is to have something up and running by tomorrow."

In a statement on its website, Geisinger even instructs members to save packaging from kits purchased beginning Jan. 15.

Save your receipts

Michael Giusti, an analyst at InsuranceQuotes, which compares insurance plan costs for consumers, said the short timeline for implementing the rules means most insurers are unlikely to be ready by Saturday to enable customers to get tests for free.

"If that is the case and someone is purchasing an at-home test in these early stages, make sure to save the receipt so a claim can be filed with their insurance company. In the future, similar to having a list of in-network medical offices, people will likely receive a list of pharmacies and retailers where they can purchase home COVID tests and not be charged," he told CBS MoneyWatch. 

That could mean more legwork for consumers until these networks exist and systems are put into place. 

"Individuals without a direct-coverage option will have to submit for reimbursement through a written claim or an online submission process. Then that will have to work its way through what the process is before they get a reimbursement check," said Wade Symons, a benefits manager for Mercer Health, a benefits consulting agency. "It is not ideal for individuals, especially if they are in frequent need of tests. It could create significant out of pocket costs."

Overburdened hospitals & new COVID studies 06:53

Other experts also expect headaches for consumers and health plans alike.

"I am not expecting it to be smooth and easy from the launch," said Sabrina Corlette, co-director of Center on Health Insurance Reform at Georgetown University. "I think there will be a lot of confusion about how this will work on the health plan side. This is a pretty big lift in terms of setting up systems and processes."

If plans go the reimbursement route, they could be responsible for collecting and sifting through mountains of test receipts. 

"This is definitely going to be glitchy to start, but hopefully over time it will a help to a lot of families financially that need to buy these tests to participate in school and community life," Corlette said. 

A major problem for many Americans

Notably, most insurance plans won't immediately cover the cost of at-home tests, doing little to mitigate upfront costs to consumers. A box of two tests can cost roughly $30, and it can be pricey to test a whole family that suspects they've been exposed to the virus. 

Ceci Connolly, CEO of the Alliance of Community Health Plans, an advocacy group that represents 25 nonprofit health plans, said insurers have been working around the clock to set up preferred retail networks so consumers can get free test kits.

"That is the ideal, smoothest way for this to happen, but there is potential for a lot of hiccups along the way," she said. 

If consumers don't know when and how they will be reimbursed, or are required to mail a paper receipt to their provider, the initiative could even discourage Americans from seeking out tests.

"We are really worried the confusion and frustration is going to discourage testing in many places, as opposed to encouraging more testing," Connolly said. 

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