Providers offering free COVID-19 tests, treatment for uninsured Alaskans may need to pivot as funding ends

The federal government is no longer covering the costs of COVID-19 tests or treatments for those without health insurance. In Alaska, many private test providers say they’re covering the cost for now but may need to soon charge some Alaskans for a service that has been free for most of the pandemic.

In some cases, those costs could run between $85 and $125 per test. And at least one provider has announced plans to close existing test sites as a way to reduce overhead costs associated with the end of the federal reimbursement program.

More than one in ten Alaskans — 12.6% — did not have health insurance in 2020, data from the Kaiser Family Foundation shows.

On March 22, a federal program that reimbursed health care providers for testing, treating and administering COVID-19 vaccines to the uninsured abruptly stopped accepting claims for COVID-19 testing or treatment “due to lack of sufficient funds,” the federal Health Resources and Services Administration website said. On Tuesday, the program will also stop accepting vaccination claims.

Over the course of the pandemic, Alaska providers have been reimbursed over $27 million for testing, $7.6 million for treatment and nearly $500,000 for COVID-19 vaccines through the program, according to data from the Centers for Disease Control and Prevention.

While Alaska’s COVID-19 cases appear to have leveled off in recent weeks after an omicron-driven surge this winter, the state’s seven-day per capita case rate is still the highest in the nation, and the threat of future variants and surges still looms on the horizon.

If another outbreak pushes more Alaskans to seek testing, those without insurance may face cost and other barriers to accessing testing and care.

Absorbing costs and closing test sites

So far in Anchorage, it appears that no clinics or sites have begun charging uninsured Alaskans for tests — but some providers say the change has prompted serious conversations about cost impact and future plans.

“We’re just going to be eating this cost until we decide whether or not it’s sustainable long-term,” said Dennis Spencer, CEO of Capstone Clinic, one of the state’s largest private COVID-19 testing providers.

“I think the bottom line is that if there is no additional federal funding allocated towards COVID-19 prevention services, people will have to start absorbing the cost burden of that,” said Jyll Green, a family nurse practitioner and the medical services manager for Fairweather LLC, which is contracted by Beechtree Molecular Lab to run two testing sites in Anchorage.

So far, Fairweather also has no immediate plans to close either of their sites or charge uninsured Alaskans for testing, but “the money is drying up,” Green said, adding that uncertainty about whether Congress or the federal government intends to restore any of those funds makes it hard to know for sure what will happen.

Beechtree, which is based in the Lower 48, received by far the most federal funding — around $17.7 million — from the uninsured program of any test provider in Alaska, CDC data indicates. The provider stands to lose millions due to the end of the federal reimbursement program, CEO Mike Murano said in an emailed statement.

“The abrupt nature of this decision has severely impacted the financial health of our company,” Murano wrote. “Beechtree will lose millions of dollars worth of COVID testing materials that will now go to waste.”

The cost of a test through Beechtree would likely be around $125 for those without insurance, Murano said.

He said the company would keep its testing sites in Anchorage open until mid-April despite the financial loss.

“Even though we understand that we will likely not ever be paid for those tests, it’s just too important,” he said.

Capstone, which is based in Wasilla, has already lost out on about $1 million in reimbursements due to the short timeline of when claims could still be filed — it received just six days’ notice from the federal government about the change, which wasn’t enough to time to finish processing all the claims for tests generated during the state’s recent omicron surge, Spencer said.

“We still had 5,000 to 10,000 claims we were still trying to get prepared to send to them when they gave us this notice,” he said.

Spencer said Capstone will likely have to come to a decision within the next two weeks about what the impact is going to be on the clinic’s bottom line, and whether it’d need to start charging a fee — likely around $85 per test — for people without insurance.

In the meantime, in an effort to cut overhead costs, the clinic decided to close some of its slower testing sites in Anchorage and consolidate staffing in a few of its main sites.

Capstone currently operates 18 test sites statewide, including eight in Anchorage. Spencer said six sites across Alaska will be shutting down: Two in Anchorage, at C Street and ChangePoint church, along with Palmer’s drive-up Capstone site will close April 16 due to a corporate decision.

Three other sites — one in Girdwood and two in Dillingham — that are operated by Capstone but fall under state control will close Thursday at the direction of the state, Spencer said Wednesday.

In recent months, the federal government has shifted away from PCR tests to rapid, over-the-counter tests, which have less overhead costs associated with processing test samples but still can still be costly for individuals.

Earlier this year, the Biden administration required all health insurance companies and health plans to cover the cost of eight over-the-counter COVID-19 tests per individual, per month. That means a family of four, all on the same plan, would be able to get up to 32 of these tests covered by their health plan each month.

Around half of the people who get tested at Capstone test sites indicate that they don’t have health insurance or leave the insurance section blank, though Spencer said the number of people without health insurance is probably close to 15%.

‘More unknowns than knowns’

The state health department is working with test providers to determine how much money is left to be able to pay for those who are uninsured, and right now there appear to be “more unknowns than knowns,” said Dr. Anne Zink, Alaska’s chief medical officer.

She said the impacts have varied broadly by provider — many smaller health clinics have been regularly billing insurance because they already know most of their patients and have their insurance information on record. The biggest challenge could be for the larger drive-up testing sites, like Capstone’s, which don’t have patient insurance information on file.

“I think the providers are also looking at how many of the patients in their system do they have health insurance information for, and can they clean up that and get more health insurance information from those who do have it,” she said.

The Anchorage Health Department transitioned COVID-19 testing and vaccinations to outside partners at the end of last year, and director Joe Gerace said in a statement that as a result of that decision, “the Municipality will not experience an immediate fiscal impact from the federal decision to stop reimbursing providers for testing and vaccinating the uninsured.”

When asked whether the department would be providing any assistance for uninsured residents, Gerace said COVID-19 vaccines continued to be available for free at the health department’s clinic, and that he was not aware of any test providers who had stopped providing free testing for the uninsured.

“The department will be monitoring the situation closely as our partners determine their next steps,” he said.

Zink said she hoped Alaskans wouldn’t be deterred from getting tested even if they didn’t have health insurance, and that some free options would likely be available even if private providers had to alter their practices.

The federal government is still providing free at-home COVID-19 tests to every household in the United States. Alaska households can place a total of two separate orders for rapid tests, four tests per order. If an order was previously placed, a second can be made now at covidtest.gov.

Alaskans can also call their local public health center (call 907-465-3150 to find the nearest one) or call 907-646-3322, the state’s COVID-19 helpline. Many libraries, community centers, schools and other public venues continue to hand out free tests, Zink said.

Green, with Fairweather, said she’s encouraging Alaskans — especially those without health insurance — to get vaccinated while the service is still free. CARES Act funding from the state will pay for COVID-19 vaccines through Fairweather’s clinics through June, she said.

Zink said the end of the federal funding program is part of a broader shift toward a “normal,” pre-pandemic health care system that has always struggled to support those who are most vulnerable and can’t always afford to pay. She said that the pandemic shed light on, and sometimes widened, existing disparities.

“I think that we need to start thinking about the structures of health care in general because, COVID and on, going back to the traditional system has created an expensive health care system that does not always produce the outcomes that we would hope for,” she said, “with a lot of variability depending on someone’s ability to pay for health care.”