Health News
Recent media coverage may have sown confusion about health reform?s requirement that health insurance plans cap how much consumers can pay out-of-pocket each year for medical care. The bottom line: for many plans, the protections will take effect as scheduled in 2014. Some plans will be able to wait an extra year to fully comply.
The health reform law requires that, starting next year, private insurance plans limit how much in cost-sharing charges ? deductibles, copayments, and coinsurance ? that people enrolled in a plan must pay each year for covered benefits provided by the plan?s network of health care providers. (This includes plans offered in the individual market or through employers. The requirement doesn?t apply to ?grandfathered? plans.) In 2014, this ?maximum out-of-pocket limit? will be $6,350 for an individual and $12,700 for a family.
Back in February, the Obama Administration provided an additional year to fully comply with this requirement but only for certain plans offered by employers.
Here are some clarifications about the February policy:
Health insurance plans in the individual market: In 2014, the maximum out-of-pocket limit will apply, as scheduled, to the individual (non-group) health insurance market. Millions of people are expected to gain coverage in this market in 2014, as health reform?s new improvements and federal subsidies significantly increase access to affordable coverage.
Employer-sponsored health insurance plans: The maximum out-of-pocket limit will also continue to generally apply to non-grandfathered plans offered by employers, including small group, large group, and self-insured plans. Employer plans that have a single insurer or administrator have to fully comply with the limit next year.
Employer plans that have ?separately administered? benefits: The Administration provided the exception in February for these plans, in which an employer has one insurer or administrator for its primary package of health benefits and a different insurer or administrator for discrete benefits, such as prescription drugs. Because employers and insurers have claimed it will be difficult to coordinate an overall maximum out-of-pocket limit across separately administered benefits, they sought and received the ability to avoid full compliance for one year.
Even those employer plans with ?separately administered? benefits that qualify for the delay still must apply some out-of-pocket limits in 2014. As the February guidance explained, these plans must ensure that their primary package of health benefits has an out-of-pocket limit of no more than $6,350 for individuals and $12,700 for families. A separately administered benefit, such as prescription drugs, that already has an existing limit on out-of-pocket costs must comply with the limits of $6,350 for individuals and $12,700 for families in 2014.
An employer plan wouldn?t have to add a cap to a separate benefit if the separate benefit currently lacks one. But this exception shouldn?t be misunderstood as broadly waiving the important out-of-pocket protection that health reform will bring in 2014.
Sarah Lueck
Center on Budget and Policy Priorities
(This was originally posted here on the Off the Charts Blog)
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Health News
Clearing Up Confusion About Health Reform?s Out-of-Pocket Protections
Recent media coverage may have sown confusion about health reform?s requirement that health insurance plans cap how much consumers can pay out-of-pocket each year for medical care. The bottom line: for many plans, the protections will take effect as scheduled in 2014. Some plans will be able to wait an extra year to fully comply.
The health reform law requires that, starting next year, private insurance plans limit how much in cost-sharing charges ? deductibles, copayments, and coinsurance ? that people enrolled in a plan must pay each year for covered benefits provided by the plan?s network of health care providers. (This includes plans offered in the individual market or through employers. The requirement doesn?t apply to ?grandfathered? plans.) In 2014, this ?maximum out-of-pocket limit? will be $6,350 for an individual and $12,700 for a family.
Back in February, the Obama Administration provided an additional year to fully comply with this requirement but only for certain plans offered by employers.
Here are some clarifications about the February policy:
Health insurance plans in the individual market: In 2014, the maximum out-of-pocket limit will apply, as scheduled, to the individual (non-group) health insurance market. Millions of people are expected to gain coverage in this market in 2014, as health reform?s new improvements and federal subsidies significantly increase access to affordable coverage.
Employer-sponsored health insurance plans: The maximum out-of-pocket limit will also continue to generally apply to non-grandfathered plans offered by employers, including small group, large group, and self-insured plans. Employer plans that have a single insurer or administrator have to fully comply with the limit next year.
Employer plans that have ?separately administered? benefits: The Administration provided the exception in February for these plans, in which an employer has one insurer or administrator for its primary package of health benefits and a different insurer or administrator for discrete benefits, such as prescription drugs. Because employers and insurers have claimed it will be difficult to coordinate an overall maximum out-of-pocket limit across separately administered benefits, they sought and received the ability to avoid full compliance for one year.
Even those employer plans with ?separately administered? benefits that qualify for the delay still must apply some out-of-pocket limits in 2014. As the February guidance explained, these plans must ensure that their primary package of health benefits has an out-of-pocket limit of no more than $6,350 for individuals and $12,700 for families. A separately administered benefit, such as prescription drugs, that already has an existing limit on out-of-pocket costs must comply with the limits of $6,350 for individuals and $12,700 for families in 2014.
An employer plan wouldn?t have to add a cap to a separate benefit if the separate benefit currently lacks one. But this exception shouldn?t be misunderstood as broadly waiving the important out-of-pocket protection that health reform will bring in 2014.
Sarah Lueck
Center on Budget and Policy Priorities
(This was originally posted here on the Off the Charts Blog)
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Millions of Americans who don't quite qualify for Medicaid could still get free health insurance through federal subsidies, but this free coverage hasn't gotten much attention, since most of the zero premium plans come with some trade-offs. An...
- What Health Reform Changes To Expect In 2012 ? Assuming The Supreme Court Doesn't Strike Down The Entire Law
The U.S. Supreme Court is set to hear arguments later this month about the federal health care-reform law, and is expected to decide the law's future this summer. While the court mulls the constitutionality of an individual mandate to buy health insurance,...
- Doi Moves To Allow Consumers To Continue Current Coverage Into 2014
The Illinois Department of Insurance (DOI) announced on November 22 that it will follow President Obama?s November 14 recommendation and allow insurance companies to renew a number of health plans in the individual and small group markets that do not...
- The ?rate Shock? Myth
As Affordable Care Act opponents continue grasping at straws to find fault with the law, an assertion perpetuated by the insurance industry that the ACA?s coverage expansions will significantly increase premiums has gained prominence. Lately, many insurance...
- The Affordable Care Act And You: The New Consumer Benefits
The election is over, and the Affordable Care Act (ACA) is here to stay. The Shriver Center, along with numerous national and local advocacy organizations, has been active in getting the word out about what is in the ACA. Surveys show that many people...