3 Coordination of Benefits Considerations to Help Navigate the Pandemic

February 18, 2021

In this time of health and economic crisis, ensuring people have continuous access to health coverage is an urgent priority. Currently, there are a number of government-led initiatives — some existing, some new and some in progress — to prevent gaps in coverage for the millions of Americans left unemployed and uninsured during the COVID-19 pandemic.

The cost of implementing these initiatives is no small sum. President Biden’s plan to expand premium subsidies for Consolidated Omnibus Budget Reconciliation Act (COBRA) coverage and Affordable Care Act (ACA) plans, for example, could cost as much as $57 billion over the next three years, HealthPayer Intelligence reports. As Biden himself has said, implementing the proposed plan won’t be cheap, “But failing to do so will cost us dearly.”

At a time when the fiscal integrity of our public health and safety net programs is especially critical, so too is the proper coordination of benefits in order to maximize the dollars funding these programs. From COVID-19-specific third-party liability considerations to premium assistance options for high-cost, Medicaid-eligible individuals, these strategies can help to preserve limited government funds, while ensuring affordable access to care for beneficiaries and their families.

  1. Capturing Third-Party Liability for COVID-19 Testing & Vaccine Services

Though many months into mask-wearing and social distancing, COVID-19 testing — and, certainly, rapid and widespread vaccine deployment — is largely new territory. States may leverage various and non-traditional sites and professionals to administer tests and vaccines, which adds complexity to the coordination of benefits process. If commercial insurance information is captured at the point of registration or at the point of service, typically the third-party payer is billed; if not, taxpayers foot the bill.

Some states have adopted a process in which individuals who receive testing or vaccine services are matched against a national claims and eligibility database to identify other, primary coverage. With this information, states can ensure the liable payers are billed going forward and recover improper payments that were the responsibility of a commercial insurer or other third party, helping to preserve the limited state and federal funds available for these services.

  1. Implementing Premium Assistance

When a high-cost individual loses employer-sponsored insurance, it is sometimes more cost-effective for states or the federal government to subsidize the cost of COBRA or other available insurance, rather than provide coverage through Medicaid or another program. This process, known as Health Insurance Premium Protection (HIPP), can offset potentially high long-term costs, while keeping people connected with the care and providers available to them under their employer-sponsored plans.

Federally funded COBRA subsidies can help bridge insurance coverage for those experiencing job loss. Medicaid programs can also help bridge this gap through COBRA-specific programs. And with the Biden administration reopening Healthcare.gov under a special enrollment period, assessing COBRA eligibility and implementing a premium assistance model through the health insurance exchange may serve as both a public health and cost containment measure — facilitating continuity of coverage and strengthening the healthcare safety net for those most in need.  

  1. Increasing Consumer Awareness of Subsidies, Other Coverage Options

For newly unemployed individuals, remaining on their employer-sponsored health plan through COBRA has historically been the most expensive coverage option — often, prohibitively so. Additionally, as ACA plan premiums have increased, middle-income Americans who do not receive premium tax credits — a majority of whom are older adults living in rural areas, according to a KFF analysis — may struggle to afford coverage through the ACA Marketplace.

As part of the American Rescue Plan, Biden has proposed a 100% federal subsidy for COBRA premiums and a cap of 8.5% of an enrollee’s income for ACA plan premiums. With regard to COBRA, this is not entirely new territory. In 2009, President Obama created a federal subsidy that covered 65% of COBRA premiums for assistance-eligible individuals as part of his American Recovery and Reinvestment Act (ARRA). However, take up of ARRA-subsidized coverage was low among COBRA-eligible workers, likely due in part to a lack of awareness. A Mathematica Policy Research Report found that just 31% of eligible individuals were aware of the subsidy. Of the 71% of unemployment insurance claimants who were eligible, only 35% opted for subsidized COBRA coverage.

With KFF estimating 2 to 3 million Americans lost employer-sponsored insurance during the pandemic, making consumers aware of available subsidies must be a priority for employers and other responsible parties, such as unemployment agencies and the Department of Labor. Draft COVID-19 relief legislation mandates written notification of the availability of COBRA continuation coverage and premium assistance; however, awareness could be improved through multi-channel outreach, including electronic communications that meet consumers where they are.

Making Coordination of Benefits a Pandemic Priority

Coordination of benefits plays an increasingly vital role in today’s healthcare landscape. Ensuring people have access to affordable health coverage — and are getting the most out of that coverage — is paramount, especially during a pandemic. Equally, the appropriate allocation of limited public healthcare dollars is essential to ensuring subsidized coverage is made available to those who need it most. Leveraging data matching and verification, adopting premium assistance programs and engaging consumers to understand their healthcare options are key to improving both efficiency and outcomes through COVID-19 and beyond.

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