Tagged Insurance

Travel Insurance During Coronavirus Pandemic: What To Know

When the pandemic struck, many travel insurance policies failed to cover Covid-19-related trip interruptions and cancellations, often because they excluded pandemics. But in the intervening months, the travel insurance industry has introduced a spate of new policies covering the disease just as many foreign destinations begin to require them.

“We’ve seen progress in that many plans will now treat Covid like any other unexpected sickness or illness,” said Stan Sandberg, a co-founder of the comparison website Travelinsurance.com. “If you have a trip and travel insurance and came down with Covid-19, which made it impossible to travel, that would fall under cancellation coverage as an unexpected illness that prevents you from traveling.”

Likewise, policies now including Covid-19 would cover holders in the event that a doctor diagnosed them with the virus while traveling under the trip interruption benefit.

Not all travel insurance excluded pandemics when the coronavirus began to spread early this year; Berkshire Hathaway Travel Protection was one exception. But the broader change partially arises from consumer demand, a better understanding of the virus — including mortality rates and hospital costs — and the industry’s eagerness for travel to resume.

“People who are traveling are more conscious of their risks and thinking about protecting themselves and their investment,” said Jeremy Murchland, the president of the travel insurer Seven Corners. The company launched policies that included Covid-19 coverage in June; they now account for more than 80 percent of sales.

But, like all insurance, the devil is in the details when it comes to understanding travel insurance, including what’s covered, destinations where it’s required, and the inevitable caveats, as follows.

How travel insurance covers Covid-19

The new Covid-inclusive insurance generally covers travelers from the day after purchase until their return home. During that period, if you become sick and a doctor determines you cannot travel (because of the virus or another illness), trip cancellation and trip interruption benefits would kick in.

These benefits vary by policy, but a search to insure a $2,000 weeklong trip to Costa Rica in December on Travelinsurance.com turned up a $69.75 Generali Global Assistance Standard policy with Covid-19 benefits that would be triggered if you, your host at your destination, a travel companion or a family member tested positive for the virus.

If this happened before your departure, the policy would cover your prepaid travel expenses. If you or your travel companion contracted Covid-19 during the trip and were diagnosed by a physician, it would reimburse prepaid arrangements, such as lodgings, and cover additional airfare to return home — once a doctor deems it safe to travel — up to $2,500. Should you be required to quarantine and can’t travel, travel delay coverage for lodging, meals and local transportation would pay up to $1,000. The policy also covers medical expenses for up to one year, even after you return home, up to $50,000 — though the policy also states that a holder would have to exhaust their own health insurance benefits before seeking coverage under the travel insurance plan.

Travelers should read these policies carefully to understand the benefits (for example, some rules vary by your state of residence), but brokers like TravelInsurance.com, InsureMyTrip and Squaremouth are making them easier to find through filters, F.A.Q.s and flags.

The new more comprehensive policies don’t necessarily cost more. On a Squaremouth search for insurance for two 40-year-olds on a two-week trip costing $5,000, the site turned up a variety of policies with or without coronavirus exclusions from $130 to $300, with no apparent premium for Covid-19 coverage.

Not every Covid-19-related expense is covered by many of these policies, including tests for the virus that many destinations require before arrival (those may be covered by private insurance).

Many policies include medical evacuation to a nearby facility, but won’t necessarily transport you home. For those concerned about treatment abroad, Medjet, a medical evacuation specialist, now offers Covid-19-related evacuations in the 48 contiguous United States, Canada, Mexico and the Caribbean that will transport you to the hospital of your choice in your home country (trip coverage starts at $99; annual memberships start at $189).

“Covid-19 requires special transport pods to protect the crew and others, which adds logistical issues,” said John Gobbels, the vice president and chief operating officer for Medjet.

In addition to the Medjet plan, travelers would need separate travel insurance with medical benefits to cover treatment costs and trip interruption.

Destination insurance requirements

Travelers aren’t the only ones worried about health. A growing list of countries are mandating medical coverage for Covid-19 as a prerequisite for visiting, often along with other measures like pre-trip virus testing and health screenings for symptoms on arrival.

Many Caribbean islands are among those requiring travel medical insurance, including Turks and Caicos and the Bahamas. St. Maarten requires health insurance coverage and strongly recommends additional travel insurance covering Covid-19.

Farther-flung countries also require policies that cover Covid-19, including French Polynesia and the Maldives.

Some destinations specify the required plan as a way to ensure travelers have the correct coverage and to expedite treatment. Aruba requires visitors to buy its Aruba Visitors Insurance, regardless of any other plans you may have.

“Insurance through a destination typically only covers Covid and infection while you’re there,” said Kasara Barto, a spokeswoman for Squaremouth.com. “If you catch Covid before, they don’t offer cancellation coverage. If you break a leg, the policy may only cover Covid medication. It varies by country.”

Costa Rica also requires insurance that includes an unusual benefit stipulating a policy cover up to $2,000 in expenses for a potential Covid-19 quarantine while in the country.

In response to the new requirement, which Costa Rica announced in October, insurers, including Trawick International, have begun introducing policies that meet the standard.

“It was a pretty quick and nimble reaction,” Mr. Sandberg of TravelInsurance.com said.

Normally, travel insurance varies by factors including the age of the traveler, destination, trip length and cost (most range from 4 to 10 percent of the trip cost). But some destinations are providing it at a flat fee, with most policies spelling out coverage limits and terms for emergency medical services, evacuation and costs associated with quarantines.

Jamaica, which will require insurance, but has not said when the new rule will go into effect, plans to charge $40 for each traveler. The Bahamas will include the insurance in the cost of its Travel Health Visa, an application that requires negative Covid-19 test results, which runs $40 to $60 depending on length of stay (free for children 10 and younger). The Turks and Caicos is offering a policy for $9.80 a day, and Costa Rica’s policies, if purchased locally, cost roughly $10 a day.

Expect this list of destinations to grow. In January, the Spanish region of Andalusia plans to require travel medical insurance and is working on finding a provider to make it easy for travelers to buy it.

Gaps in travel insurance

Policies that cover Covid-19 as a medical event that may cause trip cancellation or disruption, or those that provide coverage for medical treatment and evacuation still don’t necessarily cover travelers who have a change of heart when they learn they will have to quarantine upon arrival, even if they don’t have the virus. Nor are policies necessarily tied to conditions on the ground, like a spike in infections, State Department travel warnings, a government travel ban or the cessation of flights to and from a destination.

For those events, there’s Cancel For Any Reason, or CFAR, an upgrade to plans that generally only returns 50 to 75 percent of your nonrefundable trip costs.

“Prior to the pandemic, we wouldn’t necessarily recommend CFAR because most of travelers’ concerns were covered by standard plans,” Ms. Barto of Squaremouth.com said. “It’s about 40 percent more expensive and we didn’t want travelers to pay for additional coverage.” Now, she added, there’s been a surge in interest in the upgrade, including in 22 percent of policies sold at the site since mid-March.

Industry experts predict some of these outstanding issues may work their way into policies of the future as they adapt to enduring realities, much as they did after 9/11 in covering travelers in case of terrorist events, which was not the norm before.

The pandemic “was unprecedented, but once it happened, the industry has been pretty quick to react and create coverage, and that’s in the spirit of how this industry is trying to define itself, to be one of those subtle but valuable assets,” Mr. Sandberg said. “Once the world opens back up, we expect travel insurance to be much more top of mind with travelers.”


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What You Need to Know Now About Travel Insurance

When the pandemic struck, many travel insurance policies failed to cover Covid-19-related trip interruptions and cancellations, often because they excluded pandemics. But in the intervening months, the travel insurance industry has introduced a spate of new policies covering the disease just as many foreign destinations begin to require them.

“We’ve seen progress in that many plans will now treat Covid like any other unexpected sickness or illness,” said Stan Sandberg, a co-founder of the comparison website Travelinsurance.com. “If you have a trip and travel insurance and came down with Covid-19, which made it impossible to travel, that would fall under cancellation coverage as an unexpected illness that prevents you from traveling.”

Likewise, policies now including Covid-19 would cover holders in the event that a doctor diagnosed them with the virus while traveling under the trip interruption benefit.

Not all travel insurance excluded pandemics when the coronavirus began to spread early this year; Berkshire Hathaway Travel Protection was one exception. But the broader change partially arises from consumer demand, a better understanding of the virus — including mortality rates and hospital costs — and the industry’s eagerness for travel to resume.

“People who are traveling are more conscious of their risks and thinking about protecting themselves and their investment,” said Jeremy Murchland, the president of the travel insurer Seven Corners. The company launched policies that included Covid-19 coverage in June; they now account for more than 80 percent of sales.

But, like all insurance, the devil is in the details when it comes to understanding travel insurance, including what’s covered, destinations where it’s required, and the inevitable caveats, as follows.

How travel insurance covers Covid-19

The new Covid-inclusive insurance generally covers travelers from the day after purchase until their return home. During that period, if you become sick and a doctor determines you cannot travel (because of the virus or another illness), trip cancellation and trip interruption benefits would kick in.

These benefits vary by policy, but a search to insure a $2,000 weeklong trip to Costa Rica in December on Travelinsurance.com turned up a $69.75 Generali Global Assistance Standard policy with Covid-19 benefits that would be triggered if you, your host at your destination, a travel companion or a family member tested positive for the virus.

If this happened before your departure, the policy would cover your prepaid travel expenses. If you or your travel companion contracted Covid-19 during the trip and were diagnosed by a physician, it would reimburse prepaid arrangements, such as lodgings, and cover additional airfare to return home — once a doctor deems it safe to travel — up to $2,500. Should you be required to quarantine and can’t travel, travel delay coverage for lodging, meals and local transportation would pay up to $1,000. The policy also covers medical expenses for up to one year, even after you return home, up to $50,000 — though the policy also states that a holder would have to exhaust their own health insurance benefits before seeking coverage under the travel insurance plan.

Travelers should read these policies carefully to understand the benefits (for example, some rules vary by your state of residence), but brokers like TravelInsurance.com, InsureMyTrip and Squaremouth are making them easier to find through filters, F.A.Q.s and flags.

The new more comprehensive policies don’t necessarily cost more. On a Squaremouth search for insurance for two 40-year-olds on a two-week trip costing $5,000, the site turned up a variety of policies with or without coronavirus exclusions from $130 to $300, with no apparent premium for Covid-19 coverage.

Not every Covid-19-related expense is covered by many of these policies, including tests for the virus that many destinations require before arrival (those may be covered by private insurance).

Many policies include medical evacuation to a nearby facility, but won’t necessarily transport you home. For those concerned about treatment abroad, Medjet, a medical evacuation specialist, now offers Covid-19-related evacuations in the 48 contiguous United States, Canada, Mexico and the Caribbean that will transport you to the hospital of your choice in your home country (trip coverage starts at $99; annual memberships start at $189).

“Covid-19 requires special transport pods to protect the crew and others, which adds logistical issues,” said John Gobbels, the vice president and chief operating officer for Medjet.

In addition to the Medjet plan, travelers would need separate travel insurance with medical benefits to cover treatment costs and trip interruption.

Destination insurance requirements

Travelers aren’t the only ones worried about health. A growing list of countries are mandating medical coverage for Covid-19 as a prerequisite for visiting, often along with other measures like pre-trip virus testing and health screenings for symptoms on arrival.

Many Caribbean islands are among those requiring travel medical insurance, including Turks and Caicos and the Bahamas. St. Maarten requires health insurance coverage and strongly recommends additional travel insurance covering Covid-19.

Farther-flung countries also require policies that cover Covid-19, including French Polynesia and the Maldives.

Some destinations specify the required plan as a way to ensure travelers have the correct coverage and to expedite treatment. Aruba requires visitors to buy its Aruba Visitors Insurance, regardless of any other plans you may have.

“Insurance through a destination typically only covers Covid and infection while you’re there,” said Kasara Barto, a spokeswoman for Squaremouth.com. “If you catch Covid before, they don’t offer cancellation coverage. If you break a leg, the policy may only cover Covid medication. It varies by country.”

Costa Rica also requires insurance that includes an unusual benefit stipulating a policy cover up to $2,000 in expenses for a potential Covid-19 quarantine while in the country.

In response to the new requirement, which Costa Rica announced in October, insurers, including Trawick International, have begun introducing policies that meet the standard.

“It was a pretty quick and nimble reaction,” Mr. Sandberg of TravelInsurance.com said.

Normally, travel insurance varies by factors including the age of the traveler, destination, trip length and cost (most range from 4 to 10 percent of the trip cost). But some destinations are providing it at a flat fee, with most policies spelling out coverage limits and terms for emergency medical services, evacuation and costs associated with quarantines.

Jamaica, which will require insurance, but has not said when the new rule will go into effect, plans to charge $40 for each traveler. The Bahamas will include the insurance in the cost of its Travel Health Visa, an application that requires negative Covid-19 test results, which runs $40 to $60 depending on length of stay (free for children 10 and younger). The Turks and Caicos is offering a policy for $9.80 a day, and Costa Rica’s policies, if purchased locally, cost roughly $10 a day.

Expect this list of destinations to grow. In January, the Spanish region of Andalusia plans to require travel medical insurance and is working on finding a provider to make it easy for travelers to buy it.

Gaps in travel insurance

Policies that cover Covid-19 as a medical event that may cause trip cancellation or disruption, or those that provide coverage for medical treatment and evacuation still don’t necessarily cover travelers who have a change of heart when they learn they will have to quarantine upon arrival, even if they don’t have the virus. Nor are policies necessarily tied to conditions on the ground, like a spike in infections, State Department travel warnings, a government travel ban or the cessation of flights to and from a destination.

For those events, there’s Cancel For Any Reason, or CFAR, an upgrade to plans that generally only returns 50 to 75 percent of your nonrefundable trip costs.

“Prior to the pandemic, we wouldn’t necessarily recommend CFAR because most of travelers’ concerns were covered by standard plans,” Ms. Barto of Squaremouth.com said. “It’s about 40 percent more expensive and we didn’t want travelers to pay for additional coverage.” Now, she added, there’s been a surge in interest in the upgrade, including in 22 percent of policies sold at the site since mid-March.

Industry experts predict some of these outstanding issues may work their way into policies of the future as they adapt to enduring realities, much as they did after 9/11 in covering travelers in case of terrorist events, which was not the norm before.

The pandemic “was unprecedented, but once it happened, the industry has been pretty quick to react and create coverage, and that’s in the spirit of how this industry is trying to define itself, to be one of those subtle but valuable assets,” Mr. Sandberg said. “Once the world opens back up, we expect travel insurance to be much more top of mind with travelers.”


Follow New York Times Travel on Instagram, Twitter and Facebook. And sign up for our weekly Travel Dispatch newsletter to receive expert tips on traveling smarter and inspiration for your next vacation.

After Kid’s Minor Bike Accident, Major Bill Sets Legal Wheels in Motion

Adam Woodrum was out for a bike ride with his wife and kids on July 19 when his then 9-year-old son, Robert, crashed.

“He cut himself pretty bad, and I could tell right away he needed stitches,” said Woodrum.

Because they were on bikes, he called the fire department in Carson City, Nevada.

“They were great,” said Woodrum. “They took him on a stretcher to the ER.”

Robert received stitches and anesthesia at Carson Tahoe Regional Medical Center. He’s since recovered nicely.

Then the denial letter came.

The Patient: Robert Woodrum, covered under his mother’s health insurance plan from the Nevada Public Employees’ Benefits Program

Total Bill: $18,933.44, billed by the hospital

Service Provider: Carson Tahoe Regional Medical Center, part of not-for-profit Carson Tahoe Health

Medical Service: Stitches and anesthesia during an emergency department visit

What Gives: The Aug. 4 explanation of benefits (EOB) document said the Woodrum’s claim had been rejected and their patient responsibility would be the entire sum of $18,933.44.

This case involves an all-too-frequent dance between different types of insurers about which one should pay a patient’s bill if an accident is involved. All sides do their best to avoid paying. And, no surprise to Bill of the Month followers: When insurers can’t agree, who gets a scary bill? The patient.

The legal name for the process of determining which type of insurance is primarily responsible is subrogation.

Could another policy — say, auto or home coverage or workers’ compensation — be obligated to pay if someone was at fault for the accident?

Subrogation is an area of law that allows an insurer to recoup expenses should a third party be found responsible for the injury or damage in question.

Health insurers say subrogation helps hold down premiums by reimbursing them for their medical costs.

About two weeks after the accident, Robert’s parents — both lawyers — got the EOB informing them of the insurer’s decision.

The note also directed questions to Luper Neidenthal & Logan, a law firm in Columbus, Ohio, that specializes in helping insurers recover medical costs from “third parties,” meaning people found at fault for causing injuries.

The firm’s website boasts that “we collect over 98% of recoverable dollars for the State of Nevada.”

Another letter also dated Aug. 4 soon arrived from HealthScope Benefits, a large administrative firm that processes claims for health plans.

The claim, it said, included billing codes for care “commonly used to treat injuries” related to vehicle crashes, slip-and-fall accidents or workplace hazards. Underlined for emphasis, one sentence warned that the denied claim would not be reconsidered until an enclosed accident questionnaire was filled out.

Adam Woodrum, who happens to be a personal injury attorney, runs into subrogation all the time representing his clients, many of whom have been in car accidents. But it still came as a shock, he said, to have his health insurer deny payment because there was no third party responsible for their son’s ordinary bike accident. And the denial came before the insurer got information about whether someone else was at fault.

“It’s like deny now and pay later,” he said. “You have insurance and pay for years, then they say, ‘This is denied across the board. Here’s your $18,000 bill.’”

Although Adam Woodrum is a personal injury attorney, he says it still came as a shock to have his health insurer deny the claim after his son, Robert, got stitches in July following a bike crash. (Maggie Starbard for KHN)
Woodrum and his son, Robert, get ready to bike near their home in Carson City, Nevada, on Nov. 7. (Maggie Starbard for KHN)

When contacted, the Public Employees’ Benefits Program in Nevada would not comment specifically on Woodrum’s situation, but a spokesperson sent information from its health plan documents. She referred questions to HealthScope Benefits about whether the program’s policy is to deny claims first, then seek more information. The Little Rock, Arkansas-based firm did not return emails asking for comment.

The Nevada health plan’s documents say state legislation allows the program to recover “any and all payments made by the Plan” for the injury “from the other person or from any judgment, verdict or settlement obtained by the participant in relation to the injury.”

Attorney Matthew Anderson at the law firm that handles subrogation for the Nevada health plan said he could not speak on behalf of the state of Nevada, nor could he comment directly on Woodrum’s situation. However, he said his insurance industry clients use subrogation to recoup payments from other insurers “as a cost-saving measure,” because “they don’t want to pass on high premiums to members.”

Despite consumers’ unfamiliarity with the term, subrogation is common in the health insurance industry, said Leslie Wiernik, CEO of the National Association of Subrogation Professionals, the industry’s trade association.

“Let’s say a young person falls off a bike,” she said, “but the insurer was thinking, ‘Did someone run him off the road, or did he hit a pothole the city didn’t fill?’”

Statistics on how much money health insurers recover through passing the buck to other insurers are hard to find. A 2013 Deloitte consulting firm study, commissioned by the Department of Labor, estimated that subrogation helped private health plans recover between $1.7 billion and $2.5 billion in 2010 — a tiny slice of the $849 billion they spent that year.

Medical providers may have reason to hope that bills will be sent through auto or homeowner’s coverage, rather than health insurance, as they’re likely to get paid more.

That’s because auto insurers “are going to pay billed charges, which are highly inflated,” said attorney Ryan Woody, who specializes in subrogation. Health insurers, by contrast, have networks of doctors and hospitals with whom they negotiate lower payment rates.

Resolution: Because of his experience as an attorney, Woodrum felt confident it would eventually all work out. But the average patient wouldn’t understand the legal quagmire and might not know how to fight back.

“I hear the horror stories every day from people who don’t know what it is, are confused by it and don’t take appropriate action,” Woodrum said. “Then they’re a year out with no payment on their bills.” Or, fearing for their credit, they pay the bills.

After receiving the accident questionnaire, Woodrum filled it out and sent it back. There was no liable third party, he said. No driver was at fault.

His child just fell off his bicycle.

HealthScope Benefits reconsidered the claim. It was paid in September, two months after the accident. The hospital received less than half of what it originally billed, based on rates negotiated through his health plan.

The insurer paid $7,414.76 of the cost, and the Woodrums owed $1,853.45, which represented their share of the deductibles and copays.

Adam Woodrum and his son, Robert, bike near their home in Carson City, Nevada, on Nov. 7.(Maggie Starbard for KHN)

The Takeaway: The mantra of Bill of the Month is don’t just write the check. But also don’t ignore scary bills from insurers or hospitals.

It’s not uncommon for insured patients to be questioned on whether their injury or medical condition might have been related to an accident. On some claim forms, there is even a box for the patient to check if it was an accident.

But in the Woodrums’ case, as in others, it was an automatic process. The insurer denied the claim based solely on the medical code indicating a possible accident.

If an insurer denies all payment for all medical care related to an injury, suspect that some type of subrogation is at work.

Don’t panic.

If you get an accident questionnaire, “fill it out, be honest about what happened,” said Sean Domnick, secretary of the American Association for Justice, an organization of plaintiffs lawyers. Inform your insurer and all other parties of the actual circumstances of the injury.

And do so promptly.

That’s because the clock starts ticking the day the medical care is provided and policyholders may face a statutory or contractual requirement that medical bills be submitted within a specific time frame, which can vary.

“Do not ignore it,” said Domnick. “Time and delay can be your enemy.”

Bill of the Month is a crowdsourced investigation by KHN and NPR that dissects and explains medical bills. Do you have an interesting medical bill you want to share with us? Tell us about it!

Were You Notified About Missing Tax Forms for Your ACA Subsidy? Blame COVID.

The notice from the federal health insurance marketplace grabbed Andrew Schenker’s attention: ACT NOW: YOU’RE AT RISK OF LOSING FINANCIAL ASSISTANCE STARTING JANUARY 1, 2021.

As he read the notice, though, the Blacksburg, Virginia, resident became exasperated. Schenker, his wife and their teenage son have a bronze-level marketplace plan. Based on their income of about $40,000 a year, they receive tax credits that cover the $2,036 monthly premium in full.

When they file their annual taxes they complete an IRS form that reconciles how much they received in advance tax credits against their actual income for the year. The letter from the marketplace said they hadn’t filed for 2019, but Schenker knew they had — just as they have every year.

“I was more annoyed than anything else,” Schenker, 55, said, remembering an earlier enrollment problem that took months to resolve. “I didn’t want to get stuck in some sort of appeals category.”

Schenker’s 25-year-old daughter, Kaily Schenker, who is part owner of the family’s organic farm, got the same letter about her plan. Schenker helps her with her taxes, and she also filed the Form 8962 paperwork, he said.

Andrew Schenker (left) stands with his daughter, Kaily Schenker; wife, Lauren Cooper; and son, Julian Schenker. Andrew received a letter saying he was at risk of losing financial assistance for the bronze-level plan he shares with his wife and son. His daughter got the same letter about her plan.(Winema Lanoue)

Officials at the Centers for Medicare & Medicaid Services, which oversees the ACA marketplaces, confirmed that some consumers received notices from the agency alerting them that, according to the IRS, they hadn’t filed a tax return or reconciled their advance payments for tax credits. The letters, consumer advocates suggested, may be a result of the IRS extending the deadline for filing income taxes due to the coronavirus to July 15.

State-based marketplaces have similar requirements and likely send some version of this notice as well, said Tara Straw, a senior policy analyst at the Center on Budget and Policy Priorities who works on income tax issues related to the Affordable Care Act.

People who don’t file their taxes and the reconciliation form aren’t eligible for financial assistance with their marketplace coverage next year, including premium tax credits and any cost-sharing reductions they qualify for.

Because of the filing deadline extension, the tax form data may not have yet arrived when the federal marketplace initially asked the IRS for it in the fall, Straw said. Or other issues, including longer processing times for paper tax returns, could be responsible for a delay, Straw said.

“We don’t know how many people are in this boat,” Straw said. “We think it’s higher than in previous years because of anecdotal accounts from marketplace assisters around the country.”

Schenker said he and his daughter both filed paper returns — his family’s, in the spring, while his daughter took advantage of the pandemic extension.

Under ACA rules, people with incomes up to 400% of the poverty level ($86,880 for a family of three) can qualify for advance tax credits to help pay for coverage purchased through state or federal health insurance exchanges. When they sign up for insurance during open enrollment, their tax credits are based on estimates of their income for the coming year, and the exchanges pay insurers that amount directly. Then when people file their income taxes the following year, they use Form 8962 to reconcile their actual income against what they estimated and square off the amount in tax credits they received. If they received too much in subsidies, they must pay that back to the government.

According to the notice Schenker received, people who have already filed their 2019 tax return and Form 8962 don’t need to take any action.

Straw recommends a more hands-on approach.

“It’s really a dangerous thing to just wait and cross your fingers and hope that the data will resolve your issue,” she said.

Consumers who filed and reconciled taxes for 2019 can keep their tax credit in 2021, CMS officials said, by updating their 2021 HealthCare.gov application on or before Dec. 15 and checking the box that says, “Yes, I reconciled premium tax credits for past years.”

Straw encouraged marketplace customers to follow that advice. (State-based marketplaces generally follow the same process as the federal marketplace, perhaps with slight variations.)

Still, that might not be sufficient. Straw also recommends that people contact the IRS directly and ask for a tax transcript that shows their return was received, including Form 8962.

That way, if the marketplace does cut off premium tax credits and people have to appeal, they have documentation proving they filed the necessary forms. (If it comes to this, consumers can elect to continue receiving premium tax credits while they appeal.)

Unfortunately, people who run into this trouble might not get much expert help. Navigators are no longer required to help consumers with problems after they’ve enrolled, though they may still do so, Straw said.

Likewise, insurance brokers generally don’t help people with these problems, said Karen Pollitz, a senior fellow at KFF. (KHN is an editorially independent program of KFF.) Marketplace plan commissions are so low, “they’re much less likely to help people with complex problems,” she said.

After he got the letter, Schenker called marketplace representatives and was told to go ahead and apply for a plan for next year. He did so, making sure to check the box that said he’d filed his taxes, including the reconciliation form. And at the end of the application process, the system told him that, based on his income, his family is eligible for a tax credit of $2,000 a month. He picked a bronze plan.

He hopes that’s the end of it.

Related Topics

Cost and Quality Health Care Costs Insurance The Health Law

KHN on the Air This Week

KHN Midwest correspondent Lauren Weber discussed COVID-19 surges in Wisconsin with Wisconsin Public Radio’s “Central Time” on Nov. 13.


California Healthline correspondent Angela Hart and editor Emily Bazar discussed how the Supreme Court case about the Affordable Care Act could affect California with the CalMatters and Capital Public Radio’s “California State of Mind” podcast.


KHN chief Washington correspondent Julie Rovner discussed open enrollment for ACA marketplace plans with Maine Public Radio’s “Maine Calling” on Monday.


KHN Midwest correspondent Cara Anthony discussed protections against race-based hair discrimination with KTVU Fox 2 on Tuesday.


KHN senior correspondent Liz Szabo discussed COVID vaccine candidates with Newsy on Tuesday.


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Surprise Federal Drug Rule Directs Insurers to Reveal What They Pay for Prescription Drugs

Health insurance companies will have to give their customers estimated out-of-pocket costs for prescription drugs and disclose to the public the negotiated prices they pay for drugs, under an unexpected new Trump administration rule.

The administration said those requirements, part of a broader rule issued Oct. 29 forcing health plans to disclose costs and payments for most health care services, will promote competition and empower consumers to make better medical decisions.

The new rule does not, however, apply to Medicare or Medicaid.

The drug price provisions, which would not begin until 2022, were a surprise because they were not included in the original proposed rule issued in 2019.

It’s the departing Trump administration’s most ambitious effort to illuminate the complex, secret and lucrative system of prescription drug pricing, in which health plans, drug manufacturers and pharmacy benefit management firms agree on prices. The administration and Congress have tried and failed to reform part of that system — the rebates paid by drugmakers to the pharmacy benefit managers to get their products onto insurance plan formularies. Those payments, which some call kickbacks, are widely blamed for driving up costs to patients.

Patient advocates and policy experts, while generally supportive of the administration’s transparency concept, are divided on the cost-saving value of the new rule. Many say Congress needs to take broader action to curb drug prices and cap patient costs. Groups representing drugmakers, pharmacy benefit managers and commercial health plans have denounced the initiative, saying it will damage market competition and raise drug prices.

Advocates say the new rule will help patients in private health plans, including employer-based plans, and their physicians choose less expensive medications. It may even enable health plans to buy drugs more cheaply for their members. Three in 10 Americans say they have opted not to use a prescribed drug as directed because of the high cost, according to a KFF survey last year. (KHN is an editorially independent program of KFF.)

Under the new federal rule, starting in 2024 an insurance plan member can request and receive estimates of out-of-pocket costs for prescription drugs, both online and on paper, taking into account the member’s deductible, coinsurance and copays. Insurers say most plans already offer such cost-estimator tools.

Helping patients find drugs that cost them less could boost their compliance in taking needed medicines, thus improving their health.

“You can call your insurer now and ask what your copay is,” said Wendy Netter Epstein, a health law and policy professor at DePaul University in Chicago. “Patients often don’t do that. Whether or not this has an impact depends on whether patients take the initiative to obtain this information.”

Starting in 2022 under the new rule, private plans also will have to publish the prices they negotiated with drug companies and benefit management companies online in a digital, machine-readable format. That may be particularly helpful to employers that provide health insurance to workers, enabling them to seek the lowest price the drug manufacturer is offering to other purchasers.

The rule will not require plans to disclose rebates and other discounts they negotiate with drugmakers and pharmacy benefit managers.

That’s a disappointment to employers that provide health insurance for their workers. “We’d like a much clearer idea of how much we’re paying for every drug every time it’s dispensed,” said James Gelfand, senior vice president for health policy at the ERISA Industry Committee, which represents large self-insured employers. “We want to know where every cent in rebates and discounts is going. We’ll at least begin peeling back the onion. You have to start somewhere.”

But other experts argue the rule will do little to make medications more affordable. Indeed, they warn that publishing what health plans pay drug manufacturers could crimp some plans’ ability to get price concessions, raising the premiums and drug prices that plan members pay. That’s because manufacturers won’t want to give those discounts knowing other health plans and pharmacy benefit managers will see the published rates and ask for the same deals.

“Insurers and pharmacy benefit managers currently use rebates that are hidden from view to drive prices lower,” said Dr. Aaron Kesselheim, a professor of medicine at Harvard University who studies prescription drug policy. “If you make that transparent, you kind of reduce the main strategy payers have to lower drug prices.”

Patient advocates also questioned how useful the published rates will be for patients, because plans don’t have to post list prices, on which patient cost-sharing amounts are based. There also are practical limits to patients’ ability to price-shop for drugs, considering there may be only one effective drug for a given medical condition, such as many types of cancers.

Still, if the public knows more about how much health plans pay for drugs — and can estimate the size of the rebates and discounts that aren’t being passed on to patients — that could heighten pressure on federal and state elected officials to tackle the thorny issues of high prices and gaps in insurers’ drug coverage, which powerful industry groups oppose.

“If the information is presented to consumers so they realize they are paying a higher price without the benefit of the rebates, you’ll get a lot of angry consumers,” said Niall Brennan, CEO of the Health Care Cost Institute, a nonprofit group that publishes cost data.

The Biden administration is expected to keep the new price disclosure rule for health plans. In July, the Biden campaign issued a joint policy statement with Sen. Bernie Sanders (I-Vt.) favoring increased price transparency in health care.

But Kesselheim and other experts say Congress needs to consider stronger measures than price transparency to address drug affordability. These include letting the federal government negotiate prices with drugmakers, limiting the initial price of new drugs, capping price increases and establishing an impartial review process for evaluating the clinical value of drugs relative to their cost. Those are policies Biden has said he supports.

“There’s a limit to what transparency can do,” said Shawn Gremminger, health policy director at the Pacific Business Group on Health, which represents large self-insured employers. “That’s why we’re increasingly comfortable with policies that get at the underlying prices of drugs.” As an example, he cited the Trump administration’s proposal to tie what Medicare pays for drugs to lower prices in other countries.

Commercial insurers, drug manufacturers and pharmacy benefit managers are strongly opposed to the drug transparency rule. “This rule will disrupt the marketplace dynamics and undermine the highly competitive negotiations that kept net prices for brand medicines at a growth rate of just 1.7% in 2019,” said Katie Koziara, a spokesperson for the Pharmaceutical Research and Manufacturers of America. She wouldn’t say whether her group would sue to block the rule.

The survival of the rule, which draws its legal authority from the Affordable Care Act, also depends on the U.S. Supreme Court upholding the constitutionality of that law in a case argued on Nov. 10.

This article is part of a series on the impact of high prescription drug costs on consumers made possible through the 2020 West Health and Families USA Media Fellowship.

‘An Arm and a Leg’: For Your Next Health Insurance Fight, an Exercise in Financial Self-Defense


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A listener asked: ‘How do I remain cool when calling insurance companies?” So we called veteran self-defense teacher Lauren Taylor for advice. She leads Defend Yourself, an organization that works to empower people against violence and abuse. 

As Taylor teaches it, self-defense involves a lot more than hitting and kicking. It’s about standing up for yourself in all kinds of difficult situations. Striking that posture includes using your words, and we asked Taylor to talk us through her top strategies. This year, she used them in her own health insurance fight.


“An Arm and a Leg” is a co-production of Kaiser Health News and Public Road Productions.

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