When I first heard President Biden announce that his administration will make rapid coronavirus tests free through insurance reimbursement, I thought it was a terrible plan. Why isn’t the government procuring tests directly and distributing them free of charge, rather than making Americans go through the onerous process of purchasing tests and then applying to insurance companies to get their money back?
Upon more reflection, I think this could be an opportunity for Biden to enlist insurance companies in a new way that not only incentivizes testing but also vaccination and even preventive measures that go beyond covid-19.
The administration has made clear that simply providing tests free of charge is likely not feasible. As White House press secretary Jen Psaki said on Monday, “What happens if you — if every American has one test? How much does that cost, and then what happens after that?”
But imagine if Biden could guarantee that everyone who has private or government-sponsored insurance — more than 91 percent of Americans — receives a monthly packet of at-home antigen tests, enough for all members of their household to test twice a week. A family of four, such as mine, would be mailed 40 tests. If we use them up before the next shipment comes, all we would have to do is to send a text or email, and more would be sent to us at no added cost.
It’s common sense that people are far more likely to use something if it’s conveniently delivered to their homes than if they have to find a store that carries it, make a purchase, then complete paperwork to get a refund. And that’s if they can even afford the upfront cost. Right now, a package of two tests at CVS is $23.99. It would cost nearly $50 to test everyone in a family of four once; testing twice a week, for a month, would cost almost $500.
The prospect of navigating complicated insurance rules is another deterrent that makes it harder to achieve the public-health goal of regular surveillance testing. Because at least half of all coronavirus spread is from asymptomatic people, testing is a crucial screening tool for identifying infected people before they transmit it to others in work, school and social settings.
But testing is not only good for public health; the Biden administration could make the case to insurers that it’s in their interest to blanket Americans with tests to save on health-care costs down the line. The nonprofit FAIR Health estimates that a general covid-19 hospitalization costs more than $74,000. The charge for a complex hospitalization goes up to an average of more than $317,000. People not ill enough to be hospitalized can still develop long-term symptoms that require ongoing, costly medical care. Insurers can negotiate directly with manufacturers to purchase tests at a heavily discounted price that would directly, and quickly, produce savings.
What if people give their allotted tests to friends? First, this shouldn’t need to happen, since nine in 10 Americans can receive tests in the mail through their own insurance and the Biden administration is already planning to get free tests to the uninsured. But even if some individuals order tests to hand out to others, insurers should embrace it because regularly testing close contacts reduces everyone’s risk of getting sick with covid-19.
To further incentivize testing as a prevention strategy, insurance companies could offer a discount to those who take regular tests. Imagine if people who log their twice-weekly tests online are rewarded with a lower insurance rate in recognition of their proactive measures to protect their health.
Similarly, there should be a financial advantage given to those who are vaccinated and boosted. Put a different way, insurance companies can raise the payments for those choosing to remain unvaccinated. After all, unvaccinated people are 11 times more likely to be hospitalized with covid-19 than the vaccinated. Delta Air Lines has already started charging unvaccinated employees on the company plan $200 more per month.
In recent years, some insurance companies have started rewarding preventive measures through pilots such as reducing premiums for smokers who participate in counseling and nicotine replacement. And thanks to the Affordable Care Act, many preventive services such as cancer screenings are offered free of charge. I’m suggesting the Biden administration take it a step further and ask insurance companies to lower costs for those who abide by covid-19 health measures — and, in time, physicals, mammograms and colonoscopies. No one should be denied health care if they become ill, but why not give direct compensation to encourage better health?
The arrival of the omicron variant is a stark reminder that covid-19 will be with us for the foreseeable future. Biden has said he is “pulling out all the stops” to addressing the pandemic. Working with insurance companies to provide free tests and reward the vaccinated will reduce the spread of the virus while also decreasing cost. This could be a proof-of-concept that paves the way for reimagining health care to prioritize prevention.