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Enlisting Health Insurance Giants to Help With Rapid Covid Tests Was a Dumb Idea

One of the key lessons of the pandemic has been that this industry is utterly useless during a public health crisis.

A hand holds an unused COVID-19 rapid antigen test.
Joseph Prezioso/Getty Images

In mid-December, as the highly infectious omicron variant of Covid-19 tore across the world and the most densely populated regions of the United States retreated inside from the cold, White House spokesperson Jen Psaki managed to piss off the entire internet. At one of the regular White House press conferences, one reporterseemingly exasperated with the more-than-a-year’s worth of inaction on making rapid antigen tests more widely available to the public amid steadily rising case numbersasked, “Why not just make em free and give em out, make them available everywhere?” A smug Psaki retorted, “Should we just send one to every American? Then what happens if you … if every American has one test? How much does that cost, and then what happens after that?”

After several days of fierce blowbackcommentators called the remarks everything from “flippant” to “cringeworthy”the Biden administration answered her question as ridiculously as possible: It would force health insurers to reimburse enrollees for the tests they purchase. Oh, but not until January 15, several weeks after two major holidays typically associated with travel and indoor gatherings.

Weeks later, the directive got more specific and more complicated: Insurers would be strongly encouraged to partner with a retailer to buy tests in bulk in advance, which could be distributed to members at no charge, and would then reimburse only $12 for any tests procured independently (a payout that comes in below the cost of most tests, thereby nudging the patient to go with the designated retailer). Should insurers not link up with a retail pharmacy to provide an option with no up-front cost, they would be responsible for reimbursing the full cost of any test.

So how are patients to find out where they can get free tests, what to do if they’re gone, and how to approach reimbursement paperwork? Uhm, huh, well, how about … call your insurer and ask? Easy as pie, right? Just kidding! I’m genuinely struggling to imagine a more obnoxious policy intervention. Sure enough, in the early days of its implementation, the contours of what a mess it is are just beginning to come into focus, and they say a lot about private health insurancean industry that never, ever, ever should have been tasked with this public health challenge.

Expecting critical public health information to be disseminated to the populace through individual patients taking the proactive initiative to call their insurers and ask after it is a Pony Express–level communications strategy. Take my word for it, because I just did it: My call was answered by one of those robots that asks why you’re calling but that clearly had not been taught to recognize this sequence of English-language words: “I’d like to find out where to get free at-home Covid-19 tests.” Even when it was phrased three different ways to try to trigger the correct option, the robot biffed it: “I think you said: I’m looking for a medical clinic.” Nope!

After being transferred three times, I was simply informed that they’d reimburse me for tests. I stopped to clarify: Will they reimburse full freight for any test? Or do they have a preferred vendor where we can get them for free? I was put on hold for several minutes, while whomever I was on the phone with scurried away to find the answer to the obvious question his employer hadn’t prepped him for, after which I was finally told that their partner pharmacy is Walmart.

According to Google Maps, I live a 39-minute drive away from the nearest Walmart, or a whopping one hour and 23 minutes away by public transit. Unless I make that trek (and it may not shock you to hear that I won’t), my reimbursement requires me to save receipts, fill out paperwork, and mail it to my insurer if I want to get paid back less than half of what I paid for my last test at CVS. By the time I hung up the phone, the call had lasted 38 minutes.

And it’s not just me: The New York Times’ Sarah Kliff reported on Friday on the widespread pandemonium accompanying the rule going into effect: Insurers say they’ll need weeks to get the system going and may even have to process claims manually. The Biden administration has publicly encouraged people to keep their receipts when they buy antigen tests, without much instruction for what happens to those who don’t or to those who can’t, to those who don’t know about the preferred retailer clause, or those who can’t be bothered to fill out an indemnifying claim sheet after the fact. The only thing more gobsmacking than the Byzantine maze of a policy is how half-assedly it formulated its details. (As Kliff reports, one insurance broker has advised her clients to “save not just receipts but also the boxes that the tests come in, because some plans may require the boxes as proof of purchase.” Key pandemic mitigation provisions probably shouldn’t count on tens of millions of people to organize random trash to function properly.)

This rollout will be a disaster. And really, that should have been obvious: There’s a reason that why Covid-19 vaccines, monoclonal antibody treatments, and antiviral drugs have been made free at the point of use, rather than routed through private insurers. It’s because the insurance industry is structurally incapable of achieving anything universally or efficiently.

That’s not hyperbole, it is by design: The role of private insurers within a for-profit multipayer system is to restrict access as a gatekeeper, determining who is entitled to use which health care services and how much they pay for this. To keep these obligations profitable, they employ an army of claims assessors to argue with you, erect arbitrary hoops for providers and patients to jump through to prove you actually need certain care, raise co-pays and deductibles as high as possible, and foist as much of the paperwork as possible onto patients.

Insurance companies play the single ghastliest role in a legendarily ghastly health care system: Whatever invective you can hurl in Big Pharma’s direction, it at least produces something we actually need. Health insurers offer no value whatsoever; they have nothing to do with care itself, and if the industry vaporized completely tomorrow, no one would mourn its demisewe’d all be better off. We’re maddeningly stuck with them for now, owing to a host of reasons ranging from inertia to political capture by industry.

Late Thursday night, the Biden administration tacitly admitted what Psaki’s enlightened cyberbullies already knew: This is such a dopey plan. Starting January, the White House announced, it’ll deliver up to 500 million tests free by mail to anyone who orders them. It got there in the end, I suppose! (Assuming, of course, that it happens as planned. Find some wood to knock on.)

Nevertheless, this is an object lesson: We’re in the hands of an industry that was never built to serve patients, a problem that no regulatory tweak will ever fix. Yet, it’s pretty telling that the very moment a life-threatening pandemic necessitated mass vaccination, the idea of involving private health insurance companies with that project was absolutely unthinkable. Who in their right mind would attempt to involve them in something urgent? And if they’re such a dismal way to confer access to Covid-19 testing to anyone who needs it, why the hell are they still playing the role they do in the health care system writ large?