KEY POINTS

  • Humana and Cigna will cover members’ cost-sharing responsibilities for both in-network and out-of-network COVID-19 services
  • Aetna was first to waive cost-sharing on COVID-19 hospitalization at its in-network health systems
  • The waivers will cost the health insurance industry at least $95 billion

Two of the major U.S. insurers, Cigna Corporation and Humana, Inc., have waived patient cost-sharing on all treatments for COVID-19. The waivers include hospitalizations and ambulance transfers for their insured members and employer plans.

The coverage moves unveiled Sunday take effect Monday. It will last until May 31 for all Cigna customers. On the other hand, there is “no end date” from Humana health plans.

The third major American insurer, Aetna, Inc. (a division of CVS Health), last week became the first major carrier to waive cost-sharing on COVID-19 hospitalization at its in-network health systems. Cigna and Humana's decision means the three major U.S. carriers have now waived almost all patient out-of-pocket costs for COVID-19. Analysts said their moves should goad other insurers into following suit.

Humana and Cigna will cover members’ cost-sharing responsibilities for both in-network and out-of-network COVID-19 services. They'll also work with federal authorities to ensure their customers don't receive surprise out-of-network bills for treatment.

Both firms said the waiver applies to all medical costs related to the treatment of the coronavirus, including FDA-approved medications and vaccines when these become available. The waivers will apply to their privately insured individual and groups plans, Medicare Advantage and Medicaid members.

Cigna, Humana and Aetna will also automatically extend the cost-sharing waiver for coronavirus treatment to self-employed plans, giving them the ability to opt out. The expectation is the Internal Revenue Service (IRS) could also extend the high-deductible health plan tax ruling for coronavirus treatments. The IRS this month ruled out-of-pocket waivers on testing won't jeopardize tax treatments for high-deductible plan health savings accounts.

The waivers will cost the health insurance industry a ton of money. S&P Global estimated health insurers together are looking at $95 billion in medical costs from a severe national COVID-19 pandemic. This estimate assumes up to 30% of their privately insured members test positive for COVID-19.

“That’s a lot of money they are waiving,” said president Donald Trump of Cigna and Humana.

Medical personnel outside New York's Elmhurst Hospital Center, where 13 COVID-19 patients died in 24 hours Medical personnel outside New York's Elmhurst Hospital Center, where 13 COVID-19 patients died in 24 hours Photo: AFP / Angela Weiss

S&P Global calculated hospitalization costs for patients requiring care in an intensive care unit (ICU) might exceed $20,000 for patients under 65 on private health insurance plans. This amount will come to more than $12,000 for Medicare patients requiring ICU care.

“Our customers with COVID-19 should focus on fighting this virus and preventing its spread,” said Cigna president and CEO David Cordani. He noted that “while our customers focus on regaining their health, we have their backs.”

On the other hand, Humana president and CEO Bruce Broussard said his company's taking this significant action "to help ease the burden on seniors and others who are struggling right now. No American should be concerned about the cost of care when being treated for coronavirus."