Health insurance companies must reimburse policyholders for up to eight at-home COVID-19 tests per person each month under federal guidance published Monday.
Insurers must comply by Jan. 15. Health plans can't impose cost sharing or medical management tools such as prior authorization that would limit timely access to tests. The guidance doesn't apply to Medicare; Medicaid and the Children's Health Insurance Plan already require no-cost at-home coronavirus tests.
The free testing initiative is part of President Joe Biden's strategy to contain the nearly two-year-old COVID-19 pandemic, which he announced last month. Biden separately plans to mail 500 million at-home tests to U.S. households later this month.
"By requiring private health plans to cover people's at-home tests, we are further expanding Americans' ability to get tests for free when they need them," Health and Human Services Secretary Xavier Becerra said in a news release.
The government encourages but doesn't require insurance carriers to directly reimburse vendors that sell tests to individuals, which would reduce policyholders' costs. This only partly answers criticisms that making people seeking reimbursement after buying tests on their own would hamper access.
Health insurance companies that elect that option are allowed to cap reimbursement for tests purchased at non-preferred retailers to $12 per purchase, according to the guidance. Health plans should notify beneficiaries if they offer direct coverage of tests and what retailers are participating, the guidance says.
"A reimbursement structure that removes barriers associated with upfront costs will facilitate access to COVID-19 tests and, therefore, also improve health equity," the guidance says.
Plans are permitted to require proof of purchase, written attestations that tests are for personal use or to establish similar rules to address potential fraud.
Insurers will work as quickly as possible to implement the guidance, Matt Eyles, president and CEO of the health insurance industry association AHIP, said in a statement.
"While there will likely be some hiccups in early days, we will work with the administration to swiftly address issues as they arise," Eyles said. "Testing plays an important role in protecting the public health."
Some insurers aren't pleased. The Alliance for Community Health Plans believes the the policy misses the mark, said Michael Bagel, the policy director for the trade group, which represents not-for-profit insurers.
The administration should focus on shoring up supply chain issues that prevent people from accessing at-home tests, rather than governing how private insurers reimburse for them, Bagel said. Moreover, the federal government should bear the costs, not health plans, he said.
"Covering at-home tests in addition to everything else we're covering for COVID—treatments that have continued to go up, hospitalizations that are increasing—are just another unfunded mandate," Bagel said. The consequences will be higher spending followed by premium increases, he said.