Are Medicare Advantage Insurers Covering the Cost of At-Home COVID-19 Tests?

In the wake of the COVID-19 Omicron variant wave that began in early December 2021, the Biden Administration has taken actions to increase testing capacity, including expanding access to at-home tests through neighborhood sites such as health centers and rural clinics and establishing a new federal government website and toll-free number where people can request four free at-home tests. In addition, the Administration is now requiring private insurers to cover the cost of up to 8 at-home COVID tests per enrollee per month, as of January 15, 2022, based on authorities granted by Congress under the Families First Coronavirus Response Act (FFCRA) and the Coronavirus Aid, Relief, and Economic Security (CARES) Act.

While this policy does not apply to Medicare, the Biden Administration recently announced that Medicare will cover the cost of up to 8 at-home COVID tests per month for Medicare beneficiaries with Part B, beginning in early spring. Currently, Medicare does not cover the cost of self-administered at-home tests, though it covers diagnostic lab testing for COVID-19 under Part B. Until Medicare coverage of at-home tests for all Medicare Part B enrollees begins, Medicare Advantage plans (offered by private insurers) have the option to cover at-home tests but are not required to do so.

To assess whether Medicare Advantage plans are covering the cost of at-home COVID tests, we reviewed the websites and spoke with customer service representatives of five of the largest Medicare Advantage insurers that together cover about two-thirds of all Medicare Advantage enrollees (based on 2021 enrollment) (Table 1). We conducted our analysis January 26-28, 2022. We also analyzed access to over-the-counter (OTC) benefits among Medicare Advantage enrollees in 2021, which are an option for coverage of at-home COVID tests in some but not all plans.

As of January 28, 4 of the 5 Medicare Advantage insurers that we examined are not reimbursing enrollees for at-home tests, with only one insurer, Kaiser Permanente, providing coverage of up to 8 at-home tests per month for both their Medicare and private enrollees.

• 1 of the 5 insurers (Kaiser Permanente) will reimburse members for the cost of rapid antigen home tests.
• 1 of the 5 insurers (UnitedHealthcare) states on their website that their “Medicare Advantage members are not eligible for reimbursement of OTC at-home COVID-19 tests purchased without a physician’s order” but that “most of UnitedHealthcare’s Medicare Advantage plans have an OTC benefit that can be used to get OTC at-home COVID-19 tests” (discussed below).
• 3 of the 5 insurers (Humana, CVS Health, Cigna) state on their website that the new at-home testing reimbursement policy does not apply to people on Medicare.

Some Medicare Advantage enrollees may be able to get some coverage of at-home COVID tests through their OTC (over-the-counter) benefit.

• In 2021, 79% of enrollees in individual Medicare Advantage plans (plans open for general enrollment) and 97% of enrollees in Medicare Advantage Special Needs Plans (SNPs) were enrolled in a plan with OTC benefits. Plans that offer an OTC benefit often provide a specified dollar amount toward the purchase of eligible OTC benefits, including non-prescription medications or other health care related items, such as first aid supplies – and that amount varies by plan.
• UnitedHealthcare states that, for those enrollees in the insurer’s Medicare Advantage plans that offer an OTC benefit, this benefit can be used to cover the cost of at-home tests – although because the OTC benefit amount varies by plan, the number of tests that would be covered also varies. For example, some UnitedHealthcare plans cover up to $40 of OTC products per quarter, which would cover the cost of 3 COVID-19 tests every 3 months (based on the $12 reimbursement rate being used by private insurers). Other UHC plans have an OTC benefit of up to $100 per quarter, which would cover 8 tests every 3 months.
• Currently, Humana, CVS Health, Kaiser Permanente, and Cigna are not extending their OTC benefit to the purchase of at-home tests. Enrollees in other Medicare Advantage plans that were not included in our analysis should check with their insurer about the availability of OTC benefits and whether this benefit can be used for the purchase of at-home tests.

CMS’s announcement to cover the cost at-home tests for all Medicare beneficiaries with Part B, including those in traditional Medicare and all Medicare Advantage enrollees, will expand more testing options to one of the groups most at-risk of COVID-19 hospitalizations and death, with adults 65 and older representing about three-fourths of all COVID-19 deaths. Until this coverage takes effect in early spring, in the absence of broad coverage through Medicare Advantage plans, many Medicare beneficiaries may have difficulty affording at-home COVID-19 tests.