How COVID-19 Has Impacted Medicare
As of late August 2020, the United States has lost more than 175,000 patients due to COVID-19.
Sadly, 80% of these deaths are patients aged 65+ years, which is why it’s especially important to discuss Medicare changes during the coronavirus pandemic. After all, keeping in good health means managing your healthcare coverage too.
Here’s what we’ll cover:
- COVID-19 statistics about Medicare beneficiaries
- Regulatory Medicare changes in response to the effects of COVID-19
- How Medicare covers COVID-19 testing, services and treatment
- COVID-19 treatment and service costs under Medicare
- 3 ways that COVID-19 has impacted Medicare beneficiaries
What is COVID-19?
According to the CDC, COVID-19 stands for “corona” for “CO,” “virus” for “VI” and “disease” for “D.” It was previously referred to as “2019 novel coronavirus.”
COVID-19 is a disease caused by the latest coronavirus that reportedly originated from Wuhan, China, in December 2019.
There are 7 strains of coronaviruses, which each cause severe illnesses in animals and humans. So far, the three deadliest are Severe Acute Respiratory Syndrome (SARS), Middle East Respiratory Syndrome (MERS), and, of course, COVID-19.
As of mid-August 2020, COVID-19 cases were reported at a mortality rate of 3.63%, with 20.7 million cases worldwide, and 754,000 deaths.
Coronavirus disease can easily be transferred through coughing, sneezing, and handshakes. And the ease of transmission is what puts it at the center stage of the world.
Symptoms of COVID-19 have widely varied, but have included cough, fatigue, breathing problems, inability to taste or smell, fever, and diarrhea.
What is Medicare?
Medicare was developed in 1965 by President Lyndon B. Johnson. Medicare is a federal insurance program for:
- People over 65 years old.
- People under 65 years old who are disabled and receiving Social Security Disability benefits for at least 24 months.
- People suffering from End Stage Renal Disease (ESRD) or Amyotrophic Lateral Sclerosis, also known as ALS or Lou Gehrig’s disease.
Many qualified individuals get Original Medicare – also known as Part A and Part B – especially if they are receiving Social Security benefits when becoming eligible for Medicare coverage.
COVID-19 and Medicare Beneficiary Statistics
Before we get into Medicare changes in response to COVID-19, it’s worth mentioning some noteworthy statistics of how Medicare recipients have been impacted by the disease.
- Total Medicare beneficiary cases: 549,400+
- Total Medicare beneficiary hospitalizations: 160,800+
- Average length of stay in the hospital: 47% remained hospitalized for 1-7 days.
- Total Medicare fee-for-service payments: $2.8 billion due to COVID-19 hospitalizations.
- Beneficiaries with dual eligibility for Medicare and Medicaid were hospitalized at a rate more than 4.5 times higher than beneficiaries with Medicare only.
- Beneficiaries with End Stage Renal Disease (ESRD) were hospitalized at higher rates than other segments of the Medicare population (1,911 hospitalizations per 100,000 beneficiaries versus 241 for 65+ beneficiaries and 226 for disabled beneficiaries).
Also worth noting: Hypertension, hyperlipidemia, kidney disease and diabetes were among the top chronic conditions seen from Medicare beneficiaries who were hospitalized due to COVID-19.
*Above data is courtesy of CMS based on Medicare claims as of July 17, 2020.
Medicare Changes During the Coronavirus Pandemic
States and the federal government have enacted new regulations to accommodate the millions of affected lives and streamline the Medicare enrollment process.
The new regulations change both Original Medicare Plans and Medicare Advantage (MA) plans.
Original Medicare Plans
Original Medicare, which is administered by the Federal Government, consists of Part A and Part B.
Covers inpatient hospital and other facility-based care, including:
- Inpatient hospital care
- Hospice Care
- Home Health Care
- Skilled Nursing Facility Care
Covers doctors, medically necessary supplies, and outpatient services, such as:
- Doctor’s visits
- Diagnostic tests (x-rays, blood work, MRIs, etc.)
- Therapy visits (physical, occupational)
- Some cancer treatments like chemotherapy
- Outpatient surgeries like arthroscopic surgeries
- Outpatient mental health visits
- Durable medical equipment, like bottled oxygen
Medicare Advantage Plans (Part C)
Medicare Advantage plans are offered by private insurance companies. They may cover services that Original Medicare doesn’t, which could include:
- Chiropractic care and acupuncture
- Dental coverage
- Fitness benefits
- Hearing coverage
- Prescription drug coverage
- Vision coverage
*Note: The above benefits vary by state and health plan.
Does Medicare Cover COVID-19 Testing?
Yes, Medicare Part B covers COVID-19 testing.
Previously, Medicare beneficiaries needed a physician’s order to be tested for coronavirus. But this changed according to a CMS announcement on April 30, 2020.
The rule now allows Medicare to cover coronavirus testing without prior authorization. This enables a Medicare beneficiary to get tested at home and use community testing stations.
Medicare also covers serology tests, which are tests that check whether a person has SARS-CoV-2, the virus that induces COVID-19.
How Much Does COVID-19 Testing Cost Under Medicare?
Medicare benefits cover lab tests for COVID-19, so beneficiaries don’t have to pay for COVID-19 testing if they get the test from a doctor, lab, pharmacy or hospital in their local area.
Traditional Medicare generally covers clinical diagnostic laboratory tests at no cost-sharing. This means Medicare beneficiaries don’t have to pay the Part B deductible or coinsurance when tested for COVID-19.
The same principle applies to the COVID-19 serology test and testing-related services such as doctors’ visits, hospital observations, and emergency department services.
In addition, Medicare Advantage Plans can’t charge copayments, deductibles, or coinsurance for tests that are used to detect or diagnose COVID-19.
Does Medicare Cover Coronavirus Treatment and Services?
Individuals who contract COVID-19 and get sick may require several inpatient or outpatient services. Original Medicare covers both services.
COVID-19 Coverage Under Medicare Part A
Inpatient services include hospital stays, hospice care, and the Skilled Nursing Facility (SNF) stays.
Outpatient services include physician visits, emergency room visits, or emergency ambulance transportation.
Medicare also covers post-acute care. But it does not cover long-term services and supports like extended stays in a nursing home.
Medicare patients who are hospitalized for COVID-19 treatment would be subject to the Medicare Part A deductible of $1,408 per benefit period in 2020.
For extended hospital stays, beneficiaries pay a $352 copayment for days 61-90, followed by $704 per day for lifetime reserve days in 2020. However, if Medicare patients have to quarantine in the hospital, they won’t have to pay an extra deductible.
Lastly, traditional Medicare beneficiaries who require post-acute care after hospitalization are charged $176 daily copayments for longer days – between 21 and 100 days in a skilled nursing facility.
COVID-19 Coverage Under Medicare Part B
Medicare Part B covers certain outpatient coronavirus treatment services, which may include doctor visits or emergency ambulance transportation. In 2020, the Part B deductible is $198.
But beneficiaries who don’t have coverage beyond Original Medicare may face greater medical expenses. That’s why many Medicare beneficiaries may look for additional plan options like Medicare Advantage or Medicare Supplement plans to fill gaps in coverage.
COVID-19 Coverage Under Medicare Advantage
As mentioned earlier, Medicare Advantage plans may reduce or waive cost-sharing for COVID-19-related treatments based on CMS guidance. Updates include:
- Waiving cost-sharing for coronavirus testing
- Waiving cost-sharing for COVID-19 treatments in doctor’s offices or services delivered via telemedicine
- Waiving prescription refill limits and relaxing restrictions on home delivery prescription drugs
- Removing prior authorization requirements
- Expanding access to telemedicine
But it’s important to understand that Medicare Advantage plans have varying cost-sharing requirements. These plans also typically have daily copayments for emergency room services, inpatient hospital stays, and ambulance transportation.
Would Medicare Cover An Approved Coronavirus Vaccine?
Medicare Part B covers some preventive vaccines like influenza and Hepatitis B. And such vaccines are not subject to the deductible and coinsurance of part B.
A provision in the CARES Act requires Medicare to cover any vaccine that becomes available for COVID-19. This provision applies to both Medicare Advantage plans and traditional Medicare beneficiaries.
What telehealth benefits does Medicare cover?
The Coronavirus Preparedness and Response Supplemental Appropriations Act has waived some restrictions on Medicare telehealth coverage services during the coronavirus pandemic. This waiver allows Original Medicare beneficiaries everywhere to receive telehealth benefits.
Telehealth, also known as telemedicine, is the delivery of certain healthcare services by phone, online, or video conferencing apps. This medical technology allows patients to be treated virtually – another effective way to keep people home and help reduce the spread of COVID-19. Telemedicine covers services beyond coronavirus treatment including asthma, sinus infections, certain skin conditions and the common cold.
The Coronavirus Preparedness and Response Supplemental Appropriations Act also removes the requirement that telehealth providers must only cover Medicare beneficiaries they have treated within the past three years.
The CARES Act also authorizes federally qualified health centers to provide telehealth services to Medicare beneficiaries. The same goes for rural health clinics.
Original Medicare also covers short “virtual check-ins” for all Medicare beneficiaries. The check-ins could be via E-visits, captured video images, or telephone.
Telehealth benefits that are not covered by Traditional Medicare may be offered by Medicare Advantage plans.
How COVID-19 Has Impacted Medicare
COVID-19 has affected Medicare in many ways. Here are 3 highlights.
#1. Medicare Consumer Spending
Medicare beneficiaries, especially, could see an increase in medical spending since COVID-19 seems to have a disproportionate impact on the older demographic.
Things like increased hospitalizations, greater demand for ventilators, and more post-acute care needs could impact Medicare beneficiaries and their healthcare expenses overall.
Then there’s the cost of potential COVID-19 treatment drugs, which has made headlines more recently. Gilead Sciences announced that their COVID-19 drug, Remdisivir, would cost $520 per vial. And each COVID-19 patient is expected to take two vials daily for five days.
While much remains uncertain, an early analysis estimated that the coronavirus pandemic could increase Medicare spending from $38.5 billion to $115.4 billion over the next year.
#2. The Rise of Telemedicine During COVID-19
Telemedicine has been on the rise due to social distancing orders and the expansion of telemedicine services for Medicare beneficiaries.
The CDC also actively promoted telemedicine, providing resources to the public and giving healthcare providers information about technology tools that would allow them to efficiently use telemedicine.
This could be why we’re seeing a trend of seniors adopting telemedicine more and more.
For example, a recent healthinsurance.com survey of 1,000 Americans ages 64 and up uncovered that 44% of seniors have used telemedicine. And 43% say they intend on using it again once the coronavirus pandemic is over.
#3. Medicare Special Enrollment Periods
In response to COVID-19, CMS announced a Special Enrollment Period (SEP) for Medicare beneficiaries nationwide.
Typically, Medicare special enrollment periods are applicable in a number of situations, including but not limited to:
- A Medicare beneficiary has moved to a new address.
- A Medicare beneficiary has lost his or her current coverage.
- A health plan changes its contract with Medicare.
But COVID-19 prompted a Medicare Special Enrollment Period for qualified individuals to enroll or disenroll in Medicare Advantage plans, Prescription Drug Plans, or dual Medicare-Medicaid plans.
CMS also expanded the relief to qualified individuals who could not originally enroll in Medicare Part A or Part B because of issues with access to the Social Security Administration or job loss. (Note: The time period for qualified individuals to request this “equitable relief” due to COVID-19 ended on June 30, 2020).
Conclusion + Coronavirus Protection
From difficult rising out-of-pocket expenses and hospitalizations to silver linings like the use of telemedicine and certain regulatory changes, COVID-19 has impacted Medicare recipients – an especially vulnerable population – in unprecedented ways.
And while the future remains uncertain for all of us, there are steps we can all take to be responsible, while reducing the risk of exposure or spreading of COVID-19.
- Keep a mask, tissues, and a hand sanitizer with at least 60% alcohol on you at all times while out in public.
- If possible, avoid others who are not wearing masks.
- Try to avoid close contact with visitors, friends or family members (aka hugs and handshakes).
- Consider virtual gatherings whenever possible.
- If you can’t go the virtual route, try arranging a visit with family and friends outdoors. Yard games or BBQs are a great way to maintain social distancing.
- If you need to visit with friends and family in an indoor setting, make sure the room or space you’re in is well-ventilated and large enough to accommodate social distancing.
- Wash your hands often for at least 20 seconds – and don’t be shy about reminding friends and family to wash their hands too.