On March 18, 2020, the Centers for Medicare and Medicaid Services (CMS) issued an FAQ document announcing that catastrophic health plans can provide coverage for the diagnosis and treatment of Coronavirus Disease 2019 (COVID-19) even before enrollees meet their plan deductible requirements. Catastrophic health plans are a type of high-deductible health plan for individuals under 30 years of age and those who qualify for a hardship exemption. These plans include coverage of preventive services and essential health benefits and they are often attractive to consumers with low health care utilization because they typically have low premiums and high deductibles. Because catastrophic plan enrollees are required to pay all out-of-pocket costs until they reach the plan’s deductible, these types of plans are designed to protect patients during a serious health event.
While catastrophic plans provide coverage for essential health benefits, which includes coverage for the diagnosis and treatment of COVID-19, plan enrollees would typically be required to meet their deductible before the plan begins paying towards those services. This temporary change in policy allows catastrophic plans to amend their coverage to pay towards these services prior to the completion of the plan’s deductible. In the FAQ announcement, CMS stated that it will not take any enforcement action against any health insurer that amends its catastrophic plans to provide pre-deductible coverage for the diagnosis and treatment of COVID-19, which the agency declared will be effective until further notice. The agency also encouraged states to take a similar enforcement approach. The announcement is part of the agency’s emergency response to the public health crisis caused by the coronavirus pandemic.