Insurance Paid One Survivor's $320,000 Covid-19 Bill. What About Everyone Else?

The medical profession is doing an amazing job under impossible circumstances.

But the bill is coming due - for individuals, doctors, health insurers and hospitals. And it is not yet clear who is going to pay it. JL

David Lat reports in Slate:

I came down with a life-threatening case of COVID-19. I spent 16 nights in the hospital, including a week in the intensive care unit. I underwent an emergency intubation, six days on a ventilator. I received services experts in critical care, pulmonology, anesthesiology, infectious disease and experimental medications. If half of Americans would have difficulty finding $400 to cover an emergency expense, how many could pay my $320,000 bill, or the discounted amount of $165,000? (And) hospitals will lose an $202.6 billion from March to June 2020.

In March, I came down with a life-threatening case of COVID-19. I spent 16 nights in the hospital, including a week in the intensive care unit. I underwent an emergency intubation, followed by six days on a ventilator. I received services from multiple specialists—experts in critical care, pulmonology, anesthesiology, infectious disease—and a bevy of experimental medications, including the now-infamous hydroxychloroquine. I can’t thank my doctors and nurses enough for the care I received, which was excellent and extensive.

It was also expensive. After I came off the ventilator, the sedation wore off, and I could think clearly again, one of my first feelings—after immense gratitude and relief—was anxiety. I wondered: What will my COVID-19 treatment cost me?

I’m fortunate enough to have health insurance. I can still remember logging into the website for my insurer, UnitedHealthcare, from my hospital bed, to look up the terms of my policy. My hospital, NYU Langone, is in-network for UHC, so the applicable terms were a $1,250 deductible and a $6,000 out-of-pocket maximum. I’m also fortunate to live in New York, which has a law protecting patients from being surprised with out-of-network charges after being admitted to an in-network hospital. So my worst-case scenario was paying $7,250—which I fully expected to do, since the “sticker price” or nominal cost of my care would surely be in the six figures (or maybe even seven figures, as some predicted when I asked for guesses on Twitter).

I can’t say I was enthusiastic about the prospect of shelling out thousands of dollars, but I can’t say I was too upset either. The doctors, nurses, and other members of my care team saved my life—and how can I put a price on that?

More than two months after my hospital discharge, I have received what I believe to be the bulk of my bills (knock wood). The total sticker price, adding up the totals from my various explanation of benefit forms: about $320,000.

Now, as those of us who have seen EOBs well know, there’s usually a large difference between the nominal cost or sticker price assigned by hospitals or other health care providers and what the insurer actually pays. The sticker price can have an arbitrary, “funny money” quality, since megainsurers like UHC negotiate big “discounts,” ultimately paying the providers a fraction of the original figure.

In my case, UHC paid about $165,000, or about $10,000 for each of the 16 nights I was in the hospital. And how much did I have to pay? As I reviewed each EOB, I kept on encountering the same figure under the patient contribution section: $0, $0, $0. This puzzled me. What about my deductibles and copays?

Quick research unearthed positive news: UHC, like most other major insurers, has voluntarily waived patient cost-sharing for COVID-19 treatment. I wondered: Why would a for-profit enterprise like UHC refuse my money?

Public relations and peer pressure played a role. On March 29, President Donald Trump announced at the White House that Cigna and Humana, the fourth- and fifth-largest health insurers by membership, respectively, would waive patient cost-sharing for COVID-19 treatment. The other big insurers soon followed, with UHC, the nation’s largest, announcing just two days later.

Another reason UHC waived patient cost-sharing for COVID-19: because it can. The company made $5 billion in profit in the first quarter of 2020—that’s just profit, not revenue, in just three months. And UHC will actually benefit from COVID-19, at least in the short term. Because of the coronavirus pandemic—which took over hospitals, prevented patients from seeking (expensive) elective surgeries and other “nonessential” medical care, and kept people at home and out of trouble—UHC and other insurers will have much lower expenses associated with non-COVID-19 care. At least as of now, insurers report that what they are saving from the decline in elective and other nonessential care exceeds what they are reimbursing hospitals for COVID-19 treatment.

What has benefited insurers has brutalized hospitals. According to the American Hospital Association, hospitals will lose an estimated $202.6 billion in the four months from March to June 2020, an average of $50.7 billion a month. NYU Langone, where I received treatment, projects losses of $450 million a month and an operating deficit of $1.2 billion, from increased costs and forgone revenue in connection with COVID-19.

From the patient perspective, there are also winners and losers. The winners: those of us who have health insurance and received COVID-19 care for free. The losers: everyone else.

For starters, not everyone with health insurance will get free coronavirus care. As noted by Jordan Weissmann, the waivers of out-of-pocket costs apply only to “fully funded” health plans and not to “self-insured” plans, in which companies rather than insurers foot the bill for employees’ health care costs (typically by putting money into a trust fund, which an insurer like UHC administers but does not fund).

What you pay as a patient shouldn’t depend, in essence, on whether your disease has a good publicist.

A majority of Americans with job-based coverage belong to self-insured plans, which are popular with large corporations. These employees, if they don’t want to get hit with COVID-19 treatment costs, must hope for generosity from their employers—who don’t face the same public pressure as insurers to waive patient cost-sharing, and who may already be struggling financially because of the coronavirus pandemic.

This hardly seems fair. Should your liability for thousands of dollars in out-of-pocket costs depend on whether you belong to a self-insured plan? How many employees even know whether their employer-provided insurance is fully funded or self-funded?

And then there’s the long-standing difference in treatment between the insured and uninsured. Those without insurance remain on the hook for their often crippling COVID-19 costs—which deters many from seeking care.

I was just texting with an uninsured friend who is currently battling COVID-19. He has a temperature of 103 and a blood oxygen level of 91, below the normal range of 95 to 100, but not yet in the 80s (which is the danger zone, at least according to what my nurses told me when I was in the hospital). He is resting, drinking lots of fluids, and taking Tylenol at home. He has no plans of going to the hospital. I  texted him: “If you start having trouble breathing, go to the hospital. … Your life is more important than your finances.” He texted back: “ ‘Your life is more important than your finances’ is luxury thinking. My finances determine my life.”

I reminded him that even as an uninsured individual, he can make inquiries of different hospitals, find out how they deal with the uninsured, and negotiate his costs. Too many people don’t realize that their medical bills can be negotiated, in advance or after the fact, sometimes with the help of for-profit services or nonprofit organizations that specialize in dealing with health care billing.

But that’s easy for me to say, as someone whose insurer just coughed up enough cash to buy a Bentley. And even a heavily discounted medical bill can prove too much for many. If roughly half of Americans would have difficulty finding $400 to cover an emergency expense, how many could pay my original $320,000 bill, the discounted amount of $165,000, or even a small fraction of that? Not surprisingly, medical bills play a significant role in 500,000 or more personal bankruptcies each year.

The insurers’ beneficence for COVID-19 patients is the exception, not the rule. After tweeting about my free coronavirus care, I heard from people who suffered through other health crises and were stuck with sizable bills. One woman underwent a double lung transplant and double coronary bypass, with a $1.6 million price tag, of which she paid $2,000. A man ran up a $1.4 million bill for leukemia treatment, of which he paid $6,000. Another woman was also treated for cancer, with surgery and chemotherapy and radiation, and paid $6,000.

Their illnesses were, like mine, serious and life-threatening. They paid thousands of dollars for treatment, while I paid nothing. Suffering from the novel coronavirus as opposed to cancer shouldn’t make a difference in terms of your financial burden. What you pay as a patient shouldn’t depend, in essence, on whether your disease has a good publicist.

When I mentioned my six-figure hospitalization on Twitter, I heard from Canadians and Australians who proudly noted that they pay nothing for hospital care. Having to pay nothing for COVID-19 care, plus not having to pore over (or contest) bewildering bills, has given some of us a taste of what a single-payer system might be like. Could this trigger an increase in public support for such a system?

Whether the U.S. should adopt a single-payer system like “Medicare for all” is beyond my pay grade. I’m not an economist, just a patient. But I do think that the coronavirus crisis, the new inequities it has created, and the old inequities it has highlighted should generate renewed scrutiny of the rather bizarre economics and inscrutable incentives of our health care system.

Still, many of us will receive our COVID-19 bills, see we owe nothing, think “that’s nice,” and move on. And that’s unfortunate. A crisis is a terrible thing to waste.