Most American seniors have access to zero-cost testing for COVID-19 and fairly manageable out-of-pocket costs if they end up needing treatment for the disease. | Image: Khunatorn / stock.adobe.com
- Original Medicare and Medicare Advantage are required to cover the costs of testing for COVID-19.
- With Original Medicare, you’ll owe a deductible for hospitalization plus 20% of the cost of physician services while you’re an inpatient.
- In most of the U.S., Medigap Plans B, C, F, G, and N cover the hospital deductible.
- Medicare Advantage plans must cover coronavirus testing and associated medical visits with no cost sharing. Most MA plans charge a fixed copayment for hospitalization.
- Retiree coverage may pay some or all of your out-of-pocket costs for COVID-19 treatment.
- Medicare covers a wide array of outpatient drugs – including drugs that treat COVID-19.
Q: Will Medicare cover the costs of coronavirus testing or treatment?
A: With all the uncertainty around the new coronavirus, you may be wondering how your Medicare coverage will work if you need to be tested or even treated for COVID-19. There’s some obvious good news when it comes to testing, but when it comes to treatment, the answer is “it depends.”
Will Medicare cover testing for COVID-19?
The good news is Congress has passed the Families First Coronavirus Response Act. This new law mandates coverage at no cost under Original Medicare and Medicare Advantage for medical visits – including at a doctor’s office, telehealth, urgent care, emergency department, or hospital observation stay – where the coronavirus test is administered or ordered. Cost sharing is also waived for visits where you’re evaluated for testing and the provider decides not to do a test.
Original Medicare already covered laboratory services, including the test for the coronavirus, without cost-sharing, although the normal cost sharing under Part B would have applied for the office visit. Under the new law, Advantage plans must also cover your test without any co-pay or deductible, and there is no longer a cost for the visit itself, regardless of whether you have Original Medicare or a Medicare Advantage plan.
Recent changes to the law separately expanded Original Medicare coverage for telehealth services during the coronavirus emergency. This can be useful if you’re experiencing symptoms but aren’t sure you should risk exposure by visiting a physician’s office. You may also use telehealth to manage other illnesses during this time.
Medicare coverage of COVID-19 treatment
Just because you won’t owe out-of-pocket costs for the coronavirus screening visit and test doesn’t mean you’re in the clear if you get sick and actually need inpatient treatment.
While most infected people are able to safely recover at home, older adults and those with chronic conditions are much more likely to need aggressive treatment.
The Kaiser Family Foundation (KFF) estimates average hospital inpatient treatment costs for pneumonia of $13,767 for a person with complications or pre-existing conditions – and $20,292 average costs for pneumonia patients with major complications. These estimates comes from employer plan data – not Medicare –and refer to overall costs, not costs paid by patients.)
If you’re enrolled in Medicare, you’ll be protected from most of these costs. What you’ll pay depends on whether you have Original Medicare or an Advantage plan. KFF found that – on average – Medicare Advantage enrollees with shorter hospital stays (under five days) will pay less than people with Original Medicare, but would face higher costs for stays of seven days or longer. The amount you’ll pay will also vary depending upon whether you have supplemental coverage through Medigap (with Original Medicare), a retiree plan, or the Medicaid program.
How will Original Medicare cover the cost of treating coronavirus?
Under Original Medicare – with no supplemental coverage – you’ll owe a $1,408 deductible for each hospitalization with no additional Part A (hospital) costs through Day 60. After Day 60, you’d owe a $352 daily coinsurance through Day 90. But a long stay is unlikely. A study from Wuhan, China, found people hospitalized for COVID-19 have an average stay of 11 days. (Stays ranged from seven to 14 days).
You’d also owe 20 percent of the Medicare-approved cost for physicians services while you’re an inpatient, after the $198 Part B deductible.
After a hospitalization, some people may need additional care in a skilled nursing facility (SNF). HHS has waived the requirement that beneficiaries have a 3-day hospital inpatient stay in order to qualify for SNF care. With Original Medicare and no supplemental coverage, those patients pay $0 for the first 20 days of SNF care and $176 daily for days 21-100.
If you’re safely able to discharge home, Original Medicare covers home healthcare without cost sharing. You’d again pay 20 percent of the Medicare-approved rate for follow-up doctor’s visits under Part B. (Your share of the Part B costs would vary based on the Medicare physician services rates in your area.)
How will Medigap cover the cost of treating COVID-19?
Many people supplement Original Medicare with a Medigap plan. Medigap plans are standardized in most states, but operate differently in Massachusetts, Minnesota, and Wisconsin. In the rest of the U.S., Medigap Plans B, C, D, F, G, and N cover the $1,408 hospital deductible, and plans K, L, and M pay a portion of it. Medigap can also cover hospitalization and SNF coinsurance, Part B coinsurance, and more.
Medigap Plans C and F are the most comprehensive and protect plan holders from virtually all Medicare-covered out-of-pocket costs. However, these plans aren’t available if you qualified for Medicare after the end of 2019.
If you are enrolled in any of the Medigap plans open to newly eligible Medicare enrollees, you’ll need to at least pay your $198 Part B deductible before the plan provides physician services coverage. Under Medigap Plan G — the most comprehensive option available to people who become Medicare-eligible in 2020 or later — that’s all you’ll pay. The other Medigap plans cover varying amounts of the overall out-of-pocket costs that a Medicare beneficiary would face.
How does Medicare Advantage cover COVID-19 treatment?
During the coronavirus emergency, CMS is requiring Advantage plans to cover out-of-network care as of it’s in-network.
It’s always best to receive care at an in-network hospital, or seek plan approval if in-network care is not available. During the coronavirus emergency, CMS is requiring Medicare Advantage plans to cover out-of-network care as if it’s in network.
If you are seen by an out-of-network physician during a plan-approved stay, you’ll be protected from balance billing (being charged more because the physician is not in the plan’s network) as long as the physician participates in Medicare.
All Advantage plans have annual out-of-pocket maximums which should protect you from catastrophic treatment costs. The highest out-of-pocket allowed in 2020 is $6,700, although many plans have lower out-of-pocket maximums (the average was a little over $5,000 in 2019).
Plans will have two maximum out-of-pocket limits if they also cover out-of-network care, and it’s important to understand that while most Medicare Advantage plans include Part D prescription coverage, outpatient drug costs are not counted in the plan’s out-of-pocket limit, so outpatient medications will result in additional out-of-pocket costs.
Additional sources of coverage
If you have retiree coverage, that plan may pay some or all of your out-of-pocket costs for COVID-19 treatment after Medicare has paid. You should check with the insurer for details about your costs and whether you need to stay within a network.
People dually enrolled in both Medicare and Medicaid also receive additional coverage and likely face few – if any – out-of-pocket costs. If you’re in this situation, you should be sure to seek treatment at a hospital that accepts both your Medicare coverage and your Medicaid plan.
How does Medicare cover prescription drug costs associated with COVID-19?
Medicare Part D covers a wide array of outpatient prescription drugs, including those prescribed to treat COVID-19 and help patients recover from its effects after leaving the hospital.
Medication administered while you’re an inpatient or in a physician’s office is covered by Medicare Part B or your Advantage plan’s medical benefit if you have Medicare Advantage. While there is currently no vaccine for coronavirus, Part D plans will cover one if and when it becomes available.
We’ll continue to monitor developments regarding Medicare coverage of COVID-19, so please bookmark this page and check it periodically for updates.
Josh Schultz has a strong background in Medicare and the Affordable Care Act. He managed a Medicare ombudsman contract at the Medicare Rights Center in New York City, and represented clients in extensive Medicare claims and appeals.
In addition to advocacy work, Josh helped implement federal and state health insurance exchanges at the technology firm hCentive. He also has held consulting roles, including as an associate at Sachs Policy Group, where he worked with insurer, hospital and technology clients on Medicare and Medicaid issues.