Commercializing COVID likely means more out-of-pocket costs

Driving the news: The Department of Health and Human Services hosted a stakeholder meeting last week on the commercialization process for vaccines and therapeutics.

• "Our goal is to transition procurement and distribution of COVID-19 vaccines and therapeutics from a federally managed system to the commercial marketplace in a thoughtful, well-coordinated manner that leaves no one behind," HHS assistant secretary for preparedness and response Dawn O'Connell wrote in a blog post.
• The federal government anticipates running out of money to purchase and distribute vaccines as early as January, O'Connell wrote, and expects the federal supply of various therapeutics to be gradually depleted throughout 2023. When stockpiles run dry, it'll transition these products into the private market.
• One therapeutic — Eli Lilly's monoclonal antibody treatment — has already gone commercial at a list price of $2,100 per dose, per the Wall Street Journal.

Of note: The federal government prohibits some forms of cost-sharing while the public health emergency is still in place.

• Once that lifts, so do these rules (although not for around a year in the Medicaid program). The timing could coincide with when federal supplies run out.
• "Once the PHE ends, some of these rules that are currently in place will also end, and the increased cost sharing will take effect somewhat immediately," said KFF's Jennifer Tolbert.

How it will work: Just like the health system handles any other disease or condition.

• Vaccines: Most Americans will probably still get their vaccines for free, because insurers usually cover them without cost-sharing. The price of the vaccines will, however, be reflected in premiums, and patients could be on the hook for vaccine-related costs if they use an out-of-network provider.
• Tests: The days of easily accessible free COVID tests are numbered. Once the public health emergency ends, people will likely have to pay out-of-pocket for over-the-counter tests and may pay cost-sharing on PCR tests, said Sabrina Corlette, a research professor at the Center on Health Insurance Reforms.
• Treatments: COVID therapeutics like Pfizer's antiviral Paxlovid will "be like any other treatment. If you're hospitalized or getting a prescription drug, it's going to be subject to a deductible, coinsurance — it's going to vary based on the treatment that you need," Corlette said.

• The uninsured: It's unclear what alternatives they'll have if they can't pay out-of-pocket for care. Certain providers, like community health centers, may provide services for reduced prices or for free, but "it's safe to say that uninsured individuals will continue to face barriers accessing these tests, vaccines and therapeutics going forward," Tolbert said.

Between the lines: Insurers may choose to limit who can access certain treatments, particularly antivirals, and different health plans may end up with different policies.

• For example, there are still plenty of unsettled questions about who benefits from Paxlovid, and by how much.
• "These are going to be subject to medical necessity determinations," Corlette said. "In an area where we have this unsettled science, it could be a bit of a real tossup as to whether your plan covers the treatments that your doctor wants you to have."

The bottom line: In the not-so-distant future, costs — including co-payments and deductibles — will become a much bigger consideration when someone needs COVID testing or treatment.

• "Depending on how health plans decide to structure their cost-sharing ... individuals will have to fully pay the cost out-of-pocket until they reach the deductible," Tolbert said. "That will be a huge barrier to people being able to access these tests and treatments."