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Imagine a pack of elephants doing graceful spins, nearly in unison.

Or a fleet of semi trucks doing U-turns at top speed in an alley.

That's roughly what happened this spring, when health insurance companies, large employers, and state and federal governments pivoted rapidly in the face of COVID-19.

Within the space of weeks, many of these health care payers made COVID-19 tests, treatments and even future vaccines free, or nearly free, for the people covered by their plans.

Co-pays for COVID-19 care went by the wayside. For people with a deductible in their insurance plan, they no longer needed to meet it for clinician visits related to a possible coronavirus infection, or emergency or hospital care for COVID-19.

All these changes aimed to achieve one thing: Keep out-of-pocket costs out of the equation when infected and at-risk people were deciding whether to get tested or seek treatment.

In other words, insurers did what experts like Mark Fendrick, M.D., have been telling them they should be doing for nearly two decades: Keep money from being a barrier to the types of care that patients need the most, to improve health and possibly save money down the road. 

"If we could decide as a nation to change everything so that we could cover COVID testing and care from the first dollar, instead of putting a cost burden on the patient, why can't we do that for diabetes or maternity care?" asks Fendrick, an internist at Michigan Medicine, and director of the University of Michigan's Center for Value-Based Insurance Design.

"At a time when over two-thirds of adults say that out-of-pocket costs would be important in their decision to get care for coronavirus, and 40% of Americans don't have $400 on hand for emergencies, this pandemic has uncovered a flaw in current insurance plans that do not provide affordable coverage for critical services — including care to treat COVID-19–related illness," he says. "This could be a silver lining."

Low costs for high value

Fendrick and colleagues have long pushed for changes to federal health policy and tax law that could allow insurance plans to customize the out-of-pocket costs that their enrollees have to pay.

Instead of one-size-fits-all, those fees should be based on an individual patient's clinical situation and on established evidence about the value of certain types of care, they say.

So tests, medications, vaccines, scans and procedures that provide the most proven benefit for a person with a certain condition, or certain risk factors, would have the lowest costs.

But patients would pay much more if they and their doctors wanted them to have some sort of low-value care – something that doesn't have a strong base of evidence behind it for patients like them.

In the past two years, advocates of this kind of value-based insurance design, or V-BID, have persuaded regulators to make a series of changes that could pave the way for insurers to offer V-BID-based plans.

This has led to changes in the rules that govern Medicare Advantage plans offered by private insurers and the tax laws that apply to high-deductible health plans offered by many employers.

Each of those changes took years to get through the regulatory process. But in the space of a few weeks after the COVID-19 pandemic began, some of those same changes went into effect for participants in many other kinds of insurance.

Many patients with COVID-19 could now go from calling their provider about symptoms, to testing, to emergency and inpatient care, and back home, without having to open their wallet, says Fendrick, who is also a member of the U-M Institute for Healthcare Policy and Innovation and has a joint appointment in the U-M School of Public Health.

A virtual silver lining

The changes in recent weeks include the approval of generous coverage for telemedicine – virtual visits with providers, delivered by telephone and video chat. This was already an important element of the Medicare Advantage V-BID demonstration, but wider telemedicine coverage is another silver lining from COVID-19, says Fendrick.

Transportation access, distance and time are also barriers to high-value care for some patients. Now, so are fears about catching the coronavirus inside a health care facility, even as clinics and hospitals work hard to reduce the chance of transmission inside their walls.

"We were very happy to see that clinician reimbursement and low out-of-pocket costs for telemedicine visits will be the norm for all types of health insurance," says Fendrick. "Recent legislation requires that telemedicine is covered without cost-sharing for all services until 2021 for those plans."

Since this includes non-COVID-19 related care, this could also improve adherence to value-based treatment guidelines for other chronic conditions like high blood pressure and diabetes that are amenable for remote clinical management.

Looking ahead to vaccines

The CARES Act passed in April in Congress includes something Fendrick is proud to have played a part in: language that ensures that any COVID-19 vaccine approved by the Centers for Disease Control and Prevention will be available without an out-of-pocket cost to any insured person in the country.

This requirement amended the specific V-BID portion of the Affordable Care Act that required health plans to cover many immunizations, counseling services and screenings with no out-of-pocket costs.

Instead of the usual one-year implementation period for other preventive services under this statute, insurers would have only 15 days post-approval to start covering the full cost of the COVID-19 vaccine.

Returning to 'normal'

As hospitals and clinics ramp back up their operations during the post-peak era of the pandemic, they may be tempted to prioritize high-revenue, but low-value scans and operations over ones that hold more value for the patient but don't produce as large of a margin for the institution.

Fendrick worries about the pent-up need for primary care visits and tests that must take place in person for people with chronic conditions.

Many of them may need persuading to return to clinics in a timely way, because of worries about their high risk of developing serious cases of COVID-19. Reducing costs for them could help persuade them – and ultimately prevent much costlier problems later, he says.

"Hypertension takes years to lead to a stroke and diabetes takes a decade to lead to kidney failure," he notes. "We shouldn't squander this opportunity to focus on restarting the care that's most clinically needed first and delay those non-essential services that are not as important for a patient's wellbeing. We have a rare opportunity to align incentives to increase in high-value care and suppress the use of care that does not make people healthier."

Another VBID-inspired policy change, unrelated to COVID-19, may also help.

Just before the pandemic reached its peak in the U.S., the federal Center for Medicare and Medicaid Services announced a new program that would allow Medicare prescription drug plans to cover insulin with no cost to the participant.

About 3.3 million older Americans covered by Medicare rely on insulin to manage their diabetes and prevent long-term complications. But out-of-pocket costs can lead some to skimp on refilling prescriptions and using it.

Those patients need regular blood checks, called A1C tests, to measure blood sugars and determine if insulin doses should be adjusted. They also need regular monitoring of their eyes, kidneys and feet to track early signs of damage caused by years of high sugars.

"Given this progress in reducing financial patient barriers for COVID-19-related care and insulin, now is the time to consider similar policies for other essential visits, diagnostic tests and treatment," says Fendrick.

A note of caution

Even though the new policies are likely to help millions of Americans get COVID-19 testing and care without cost, Fendrick notes that the newness of the changes, and of the disease itself, could lead to hiccups.

Since COVID-19-related codes in medical billing systems are new, clinics and hospitals need to make sure they code visits correctly so that patients don't get bills later on.

Similarly, providers should make sure that the testing locations they're referring patients to are in-network for their insurance plan, to avoid an unexpected "surprise bill."

Patients who do get a bill for something that should be free under COVID-19-related policies should call their insurer immediately. They should also involve their provider in advocating for the bill to be waived or reduced.

"How our health care delivery system will rebound from this pandemic remains unclear," says Fendrick. "What is certain is that a large and rapid infusion of funds is necessary to meet the huge unmet clinical need and restore the financial footing of many clinician practices and hospitals. Aligning provider and consumer incentives to ensure that a greater proportion of health care spending is dedicated to care that improves health and fewer expenditures are devoted to care that produces no or little clinical benefit is what we have been advocating for over 20 years."

After all, elephants may sometimes be able to execute a perfect pirouette. But sometimes they need a little push.