How the end of federal COVID funding will shift the cost of vaccines, tests and treatment to California consumers

“Who you have insurance from – or if you don't – really matters.” – Jen Kates, Kaiser Family Foundation,

For most of the pandemic, Americans haven’t had to worry about getting access to COVID-19 vaccines, treatments and tests. But as the federal government ends its coverage of those services early next year, the cost of care will be shifted to consumers, insurers and “safety net” providers.

With the loss of universal coverage, “who you have insurance from — or if you don’t — really matters,” said Jen Kates, of the Kaiser Family Foundation, who led an analysis of the impact of commercialization of COVID-19 prevention and care, released this week.  “The uninsured stand to lose the most.”

Until now, the federal government has been purchasing billions of dollars worth of supplies and giving them away for free. But with cases dropping and funding running short, the strategy is shifting. The Biden administration announced in August that by January 2023 it expects to end its purchase and free distribution of vaccines, tests, treatments and other supplies.

The reasons are twofold: The protections that were created by the Public Health Emergency declaration are expected to end early next year. Plus, money is rapidly running out, and Republicans in Congress have been skeptical of the Biden administration’s $18.4 billion request for more COVID money to restore supplies.

While the administration knew it would have to someday make the shift, the sudden funding shortfall could create a rougher transition, said Dawn O’Connell, assistant secretary at HHS for preparedness and response, at a Wednesday webinar.

“It was always part of our plan and something that we needed to do. But the process is complex,” she said. With greater funding, the shift “is a little less bumpy.”

In California, this means that “some clinical sites might decline to purchase supplies,” such as vaccines, according to the state’s Department of Public Health. “Federal purchase and reimbursement of COVID-19 vaccine have reduced economic barriers to access and increased the range of locations for vaccination, compared to other routine vaccines.”

The change could create particular hardship for the estimated 30 million Americans without insurance coverage.

Bay Area county health departments said it means they must must work even harder to make sure people in hard-to-reach communities are enrolled in MediCal or get care from federal “safety net providers,” such as community health centers.

“This is a travesty for those who are … economically challenged,” said San Jose physician Dr. Walter Newman, who has relied on free vaccines to protect farmworkers in Monterey, Santa Clara and San Mateo counties. With health care costs covered by a modest trust, “it’s not in our budget to go out and spend hundreds of thousands of dollars.”

The regulatory status of different products could influence coverage. For instance, Medicare and MediCal limit coverage if a product, such as the antiviral Paxlovid, only has Emergency Use Authorization status and is not yet approved by the FDA.

There’s another challenge: Manufacturers will need to make sure that they have adequate supplies to supply the commercial market, said O’Connell.

“There’s going to be a point where our supplies run low — and their supplies need to ramp up, in order to take on this work,” she said.

How will different groups of Californians be affected? It depends on your coverage, according to the Kaiser Family Foundation analysis.

Medicare

• Vaccines: You will continue to have access to all COVID-19 vaccines at no cost under Part B.
• Treatments: When the Public Health Emergency ends, you may be responsible for all or part of the cost for most treatments, including monoclonal antibody treatments. That’s because most antiviral drugs, such as Paxlovid, are only authorized, not approved. Until FDA approval, Medicare is not expected to cover these treatments. Once approved, antivirals will be covered under Medicare Part D. But you may face “cost sharing” for the antivirals, depending on your Part D plan. once the current supply is depleted.
• Tests: When the Public Health Emergency ends, you must pay the full cost of an at-home COVID test. Some Medicare Advantage plans, however, may cover the cost of at-home tests through an over-the-counter benefit or other coverage approach. The clinical diagnostic testing for COVID-19 disease will continue to be covered, but you may face “cost sharing” for testing-related services.

Private Insurance

• Vaccines: You will continue to pay nothing out-of-pocket for COVID-19 vaccines, although there may be some exceptions, such as if you get your shot from an out-of-network provider. Because insurers will be required to take on more of the cost of vaccines, that could nudge premiums higher.
• Treatment: You may be responsible for part of the cost for most treatments, depending on your policy. Because insurers will be required to take on more of the cost of treatment, premiums could rise.
• Tests: When the Public Health Emergency ends, many people with private insurance will likely be subject to cost sharing for COVID-19 tests. Insurers may also limit coverage of testing to in-network providers or require a prescription or physician’s order for testing. Insurers may also limit the number of tests or stop covering the cost of tests altogether.

MediCal

• Vaccines: Children likely will get free access under the Vaccines for Children Program. Adults likely will continue to get coverage of vaccines with no cost sharing.
• Treatments: Under the American Rescue Plan Act, MediCal will pay for your treatments for COVID–19, with no cost sharing, through the first quarter that begins one year after the health emergency ends. Once that’s over, your treatments will be covered, but you’ll likely need to pay part of the cost.
• Tests: COVID-19 tests, including at-home tests, will be covered through the first quarter that begins one year after the health emergency ends. Once that’s over, your test will be covered only if it is ordered by a doctor. California may opt to cover tests without a doctor’s order, but you might have to pay part of the cost.

Uninsured

• Vaccines: Children likely will get free access under the Vaccines for Children Program. It’s a different story for adults, whose free vaccines are based on Congressional funding, and it’s likely that supplies will be limited. Some may be able to get vaccines on a sliding-scale basis from certain safety net providers, such as community health centers, but others will have to pay full cost.
• Treatments: You’ll have to pay the full cost for the medications plus any necessary physician or other visits. Some people may be able to get treatments on a sliding-scale basis from certain safety-net providers.
• Tests: You’ll have to pay the full cost of tests, although you may be able to obtain free or reduced-cost tests from local health departments or safety net providers.

For more information, go to the Kaiser Family Foundation’s website.