The federal government must pay for distribution of the COVID vaccine

What if we had a safe and effective vaccination, manufactured hundreds of millions of doses, but not enough Americans were vaccinated? We could suffer hundreds of thousands of unnecessary deaths, months of preventable lockdowns, and trillions of dollars of economic losses if we don’t act now to be sure that vaccines are readily available and are given to (almost) every American. 

COVID-19 is not as contagious as measles, where we only achieve “herd immunity” with 96-99 percent vaccination rates. But it is more contagious than influenza, where our 43 percent vaccination rate saves lives but doesn’t prevent serious outbreaks each fall and winter. Experts estimate that we need immunity rates of 55-82 percent to suppress widespread COVID-19 outbreaks. That translates to a need for more than 200 million doses of vaccine in the  U.S. and 7 billion doses across the globe — assuming a single shot provides immunity. 

This won’t be cheap. If the vaccine costs $250 (the cost of vaccine to prevent shingles), the cost to procure vaccines could be $50 billion. But this is a small price compared to the death, illness and economic loss that continued waves of infection would inflict.

How can we finance such a cost? Our current system is complex, fragmented and incomplete, and could delay the delivery of enough vaccines to reopen our economy with confidence. The Coronavirus Aid, Relief, and Economic Security (CARES) Act requires that individual and employer-sponsored health insurance pays for a future COVID-19 vaccination. But those on commercial insurance could still be subject to prior authorization requirements or face high out of pocket costs if they go to out of network providers. Medicare pays for vaccinations through Medicare Part D — requiring beneficiaries to stay “in-network” for coverage. Medicaid covers vaccinations with no cost-sharing, but 14 states have not expanded Medicaid, and the extra cost of this vaccine hits state budgets just as they suffer the worst decrease in state revenue since the Great Depression. Insurance plans unregulated by the Affordable Care Act have no obligation at all to cover the vaccine. Those who are uninsured, 27.9 million before the pandemic, would have to pay for the vaccine out of pocket. Undocumented residents are not eligible for Medicaid or exchange subsidies, and many work in high-risk service jobs without health insurance coverage.

As a result, the federal government must step up to purchase and distribute all COVID-19 vaccine. The reasons to do so are compelling. The value of high vaccination rates accrues to all of society and decreases the risk the virus will spread. The federal government can demand a lower unit price. There will be less potential for hoarding when the vaccine might initially be in short supply. Americans won’t need to navigate a complex maze of networks and prior authorization, and it will be easy to make the vaccination available in non-medical settings such as schools and community centers.

Federal funding for the COVID-19 vaccine also has some other benefits. It helps make health insurance premiums more affordable by decreasing the uncertainty associated with 2021 medical costs. Also, it will keep us competitive in global markets as other developed countries already have national programs in place to guarantee access to vaccination. 

Plus, there’s precedent. The federal government currently purchases about half of all pediatric vaccinations through the Vaccine for Children Fund (VCF), which it distributes through states and public health entities. The same infrastructure could facilitate the rapid adoption of the COVID-19 vaccine. 

Of course, there will be naysayers. Vaccine manufacturers might complain about lost margins if they could charge whatever the market will bear for the vaccine, which could be thousands of dollars per dose. Health insurance plans might prefer a more direct role in the reimbursement process. And some are ideologically opposed to add to the scope of the government. However, if we give into these concerns, we’d see lower vaccination rates and higher unit costs. This will lead to more death, more illness, and more economic devastation. Those are risks too great to bear. 

We need to vaccinate all residents of the  U.S. quickly when a safe, effective vaccination becomes available. It’s time to put aside any political divides and enact legislation to ensure that we have federal financing in place to expedite the end of this pandemic.

Jeff Levin-Scherz, M.D., is an assistant professor at the Harvard TH Chan School of Public Health and Harvard Medical School.