While most of Medicare’s 63 million beneficiaries are still waiting for no-cost at-home COVID-19 tests, some Medicare Advantage carriers already cover them.

Medicare Advantage plans often include supplemental benefits that pay for things the traditional fee-for-service Medicare program does not, including over-the-counter health products. And while big players such as Humana, Cigna and CVS Health’s Aetna aren’t yet covering OTC COVID-19 tests, competitors including UnitedHealthcare, Kaiser Permanente and SCAN Health Plan are. Those insurers make tests available either as part of their benefit packages or by reimbursing pharmacies for dispensing kits.

Fallon Health, a regional insurer in Massachusetts, for example, will retroactively cover all COVID-19 tests purchased by its 12,500 Medicare Advantage members after Jan. 5. By paying for the tests, the insurer believes it can keep its older enrollees out of emergency departments, improve patient outcomes and decrease costs.

“The goal is to reduce the incidence of the COVID infections,” said Dr. David Brumley. Fallon Health’s interim chief medical officer. “If there’s less transmission, and people get sick less often because they’re testing, that’s obviously a benefit. ” The insurer intends to add COVID-19 tests to its pharmacy benefit so customers can obtain them at no cost from drugstores, he said. The insurer and UnitedHealth Group’s OptumRx, its pharmacy benefit manager, are still working out details such as how much to pay for the kits.

Fallon Health is ahead of an industry preparing to incorporate over-the-counter COVID-19 tests into their benefits.

The Centers for Medicare and Medicaid Services unveiled a policy this month providing Medicare coverage for at-home COVID-19 tests starting this spring, following pushback from lawmakers and advocates. While the agency hasn’t disclosed much about how the benefit will work, fee-for-service Medicare and Medicare Advantage plans will have to pay for up to eight tests a month for each beneficiary. Previous federal policies required Medicaid , the Children’s Health Insurance Plan and private health insurance companies to cover tests.

“The biggest open question right now is just how they’re going to roll this out,” said Meredith Freed, a senior policy analyst at the Kaiser Family Foundation.

Alliance of Community Health Plans members started exploring OTC COVID-19 test coverage after the federal government began requiring commercial insurance plans to pay for them, said Dan Jones, vice president of federal affairs at the trade association for not-for-profit health insurance companies. Customers had flooded Medicare Advantage plans’ phone lines asking asking why they couldn’t get free tests, which prompted some companies to take action, he said.
“It’s a great case of Medicare Advantage plans being innovative and flexible,” Jones said. “When issues pop up with the pandemic or there’s another need for services, they’re able to be flexible with their supplemental benefits.”

Health insurance carriers that already were covering at-home test for commercial customers have a leg up on peers that weren’t, Jones said. So do companies such as UnitedHealth Group that own pharmacy benefit managers, he said. UnitedHealthcare, which has 6.5 million members or 28% of the Medicare Advantage market, estimates that 85% of its Medicare Advantage members have over-the-counter product coverage.

CMS may reimburse Medicare Advantage plans for the OTC COVID-19 tests they cover, said Gretchen Jacobson, vice president of Medicare at the Commonwealth Fund. This, however, would elevate Medicare Advantage benchmark payments and rebates, which could lead to higher costs for patients and taxpayers, she said.
“There’s basically some financial trade-offs in how you go about doing it, “ Jacobson said. “Do you then try to take the money money out in future years? How do you ensure basically that they’re not paying twice for something that’s a one-time thing, depending on how long this is going going to go on? It gets complicated.”