This week, Joe Biden had another setback as the Supreme Court blocked his OSHA-based vaccine mandate on private employers. Still, another COVID-19 mandate on private health insurance companies is likely to cost hundreds of billions of dollars per year. The rule that requires insurers to cover up to eight COVID tests for at-home use for every covered person per month is almost certain to lead to increases in premiums paid by policyholders.
The rule could require test purchases for up to 215 million Americans with private health coverage. The estimated total cost is reported to run more than $20 billion per month. The Biden White House has ordered private insurance companies to reimburse covered individuals up to $12 per test up to eight times each month.
Americans currently use far fewer tests than the amount covered by the reimbursement rule, but the Biden Administration is taking an approach much more reliant on increased testing recently.
When the new rule was announced, Health and Human Services Secretary Xavier Becerra declined to comment on the financial arrangement between the federal government and private insurers. Becerra said that the mandate is part of the department’s strategy to “ramp up” at-home testing at no direct cost to individuals. Of course, the cost incurred by insurers will be reflected in increased premiums. Before the new rule, insurers were only required by law to cover the cost of testing ordered by treating medical professionals.
Blue Cross Blue Shield CEO Kim Keck said it would be challenging to meet the new rule’s requirements, announced on Monday but effective on Saturday. Keck said that the company is concerned about the limited supply of currently available tests nationwide and the additional costs. Industry commentators are worried that companies will struggle to negotiate the prices paid for tests given the brief time allowed for compliance with the new rule.
The Biden Administration recently announced that it plans to buy more than 500 million tests for distribution to Americans who request test kits. That expected demand is placing even more stress on the limited supply available to insurance companies scrambling to be prepared to comply with the new rule.
With retail costs of at-home tests already topping $30 in some locations, even the threat of increased demand because of the new Biden mandate is sure to send retail prices even higher and depress available supply further.