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HHS to divert some of the $100B hospital COVID-19 funding to uninsured

Dive Brief:

  • The Trump administration said Friday it will pay hospitals to treat uninsured COVID-19 patients, targeting a crucial coverage gap as the novel coronavirus continues to overwhelm and upend the U.S. healthcare system.
  • HHS Secretary Alex Azar said the funding will come in part from the $100 billion in the relief legislation signed late last month.
  • “As a condition of receiving funds under this program, providers will be forbidden from balance billing the uninsured for the cost of their care. Providers will be reimbursed at Medicare rates,” Azar added.

Dive Insight:

The Trump administration has refused calls by Democrats and some others to open a special enrollment period for Affordable Care Act plans, which would allow people to sign up for coverage without a specific qualifying life event. Several states that control their own marketplaces have taken that action.

After years of declines following the enactment of the ACA, the rate of uninsured in the U.S. rose again in 2018 to 8.5%, or about 27.5 million people. Since most people have coverage through their employer, the rate is expected to skyrocket amid layoffs and business closures in the wake of shutdowns and shelter-in-place guidelines aimed at reducing spread of the novel coronavirus.

Hospitals, especially those in hard-hit areas, have been scrambling to find the space, equipment and staff to treat the wave of COVID-19 patients, all while deferring lucrative elective procedures. This has put some facilities, especially those in rural areas, in dire straits financially.

To help them meet payroll and stay open, Congress allocated $100 billion in emergency funding last week. But HHS had not said how or when the money will be distributed.  

Now HHS says some will go to help pay to treat the uninsured.

“We will use a portion of that funding to cover providers’ costs of delivering COVID-19 care for the uninsured, sending the money to providers through the same mechanism used for testing,” Azar said in a statement late Friday.

In the first two weeks of March, more than 700,000 Americans lost their jobs. The U.S. Bureau of Labor Statistics does not yet have a tally for the rest of last month, but the Economic Policy Institute estimates about 3.5 million people have lost employer-sponsored health insurance in the past two weeks.

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