The End of the COVID Emergency: What It Means for Benefit Administrators, Medicare, and Medicaid


Posted by: Altura Benefits in Insurance

COVID public health emergency ending

The COVID-19 public health emergency is set to expire on May 11, 2023. During the public health emergency, many temporary rules were introduced to help alleviate the health and financial impacts of the pandemic. The end of the COVID emergency will have far-reaching effects on health plan administration and coverage for millions of Americans.

Changes to Coverage for COVID-19 Vaccines, Tests, and Treatments

During the pandemic, there have been no out-of-pocket costs to access COVID-19 vaccines, tests, and treatments for many people. HHS says COVID-19 vaccines have been free to everyone living in the U.S., regardless of whether they have health insurance. Additionally, U.S. households have been eligible to receive free at-home COVID-19 tests.

According to the Peterson-KFF Health System Tracker, there has been no federal requirement for insurers to cover COVID-19 treatments without out-of-pocket costs, but some states have created such agreements with insurers. In addition, 88% of people in fully-insured private health plans had their out-of-pocket COVID-19 treatment costs waived early in the pandemic. However, insurers were already phasing out these waivers by the end of 2020 and 2021.

The end of the public health emergency may result in additional changes. For example, Medicare Part B beneficiaries will lose access to free over-the-counter COVID-19 tests and private insurers will no longer be required to cover COVID-19 tests without cost sharing.

However, a fact sheet on the public health emergency transition from HHS says access to COVID-19 vaccinations will not generally be affected. Vaccines that are recommended by the CDC’s Advisory Committee on Immunization Practices (ACIP) are considered a preventative health service – and the ACIP currently recommends some COVID-19 vaccines. Therefore, most private health insurance plans provide these vaccines without a copay. Additionally, Medicare Part B will continue to cover the COVID-19 vaccine without cost sharing. Medicaid will cover all COVID-19 vaccinations with a copay through September 30, 2024, and the ACIP-recommended vaccines after that.

Changes in coverage for treatments may depend on the health plan. However, Medicaid will cover COVID-19 treatments without cost sharing through September 30, 2024.

The End of Medicaid Continuous Coverage

During the pandemic, the federal government increased the federal funding states receive as long as the states agreed to certain protections for Medicaid beneficiaries. One of these conditions was continuous enrollment for beneficiaries until the end of the public health emergency.

According to HHS, the end of the public health emergency will not impact Medicaid continuous enrollment. This is because the federal government agreed to end the condition as of March 31, 2023, as part of the Consolidated Appropriations Act. This means continuous Medicaid enrollment is set to end before the end of the public health emergency.

This could impact millions of individuals. According to the Commonwealth Fund, Medicaid’s continuous enrollment contributed to a 25% increase in Medicaid enrollment between 2020 and 2022. It’s estimated that 13 million to 16 million people could lose coverage once continuous enrollment ends. Poor working-age adults in states that have not expanded Medicaid under the ACA face the highest risk of losing coverage. (Utah has expanded its Medicaid program eligibility as of January 2020.)

The change will also impact some Medicare beneficiaries. According to KFF, 12.5 million Medicare recipients are also enrolled in Medicaid and receive financial assistance through the program. These people often enroll in Dual Eligible Special Needs Plans (D-SNPs). If they lose their Medicaid eligibility, they will lose their financial assistance and will need to enroll in a different Medicare plan.

Furthermore, HHS says the end of the public health emergency will mean the end of certain Medicare and Medicaid waivers and broad flexibilities for healthcare providers. These waivers were implemented to expand facility capacity during the pandemic, but the extra capacity is no longer necessary.

The End of Extended Benefit Election Timeframes

During the COVID-19 national emergency, a rule from the IRS and the Employee Benefits Security Administration meant individuals received additional time to make special enrollment and COBRA elections.

Employees and their dependents are eligible for special enrollment periods under certain circumstances, such as when an employee or dependent loses eligibility for a health plan in which they were previously enrolled or they become eligible for coverage because of birth, marriage, or adoption. They normally have 30 days from the occurrence of the event that triggers the special enrollment period to request enrollment. Individuals who have lost Children’s Health Insurance Program (CHIP) coverage have 60 days. Additionally, after employees or their dependents lose group health plan coverage, they typically have at least 60 days to elect COBRA continuation coverage.

However, the period from March 1, 2020, until 60 days after the end of the COVID-19 National Emergency has not counted when determining the 30- or 60-day election period for a special enrollment period or the 60-day election period for COBRA continuation coverage. Health plan administrators have also needed to disregard this period when determining certain other dates, such as when COBRA premiums are due or when individuals need to notify the plan of a qualifying event under ERISA.

The end of the public health emergency will trigger the end of these extensions. As a result, normal timeframes for COBRA elections and special enrollment periods will resume on July 11, 2023, which is 60 days after the end of the emergency. This means individuals will only have a limited amount of time (the normal 30- or 60-day limits) to make elections, provide notices, and make payments.

Possible Changes to HDHP and HSA Rules

To contribute to a health savings account (HSA), an individual must be enrolled in a high-deductible health plan (HDHP). The IRS has strict rules and definitions for HDHPs. In 2023, the deductible had to be at least $1,500 for an individual plan or $3,000 for a family plan. Plans that provide certain types of coverage with a deductible could lose their HDHP status, meaning enrollees would be ineligible to contribute to HSAs.

During the pandemic, the IRS issued a notice stating health plans that otherwise meet the criteria for HDHPs would not lose their status just because they provide COVID-19 testing and treatments without a deductible or with a low deductible. The notice says this rule applies “until further guidance is issued.”

If this guidance changes with the end of the public health emergency, HDHP plans will be forced to require a deductible for COVID-19 treatments and tests. Otherwise, they risk losing their HDHP status.

Telehealth Is Likely Here to Stay

Telehealth was already gaining traction before the pandemic. New rules increased access during the COVID-19 emergency.

According to HHS, Medicare telehealth flexibilities will remain in place at least through December 2024 due to legislation contained in the Consolidated Appropriations Act of 2023. Additionally, Medicaid telehealth flexibilities, which are managed at the state level and were available before the COVID-19 public health emergency, will likely remain in place.

Telehealth will likely remain popular in group health plans. The KFF 2022 Employer Health Benefits Survey found that 96% of large firms and 87% of small firms cover some healthcare services through telemedicine in their largest health plans.

Navigating the End of the Public Health Emergency

The COVID-19 emergency has been in place since March 2020. As a result, many of the temporary rules created to deal with the pandemic have been the norm for three years now. The reversal of these rules will likely create significant upheaval for health plan administrators and people enrolled in group health plans, Medicare, or Medicaid.

Do you need help navigating your health insurance options and changing benefits? Contact Altura Benefits.