Out-Of-Pocket Limits Under Health Reform
One provision of the Affordable Care Act sets rules for how much policyholders are allowed to spend on medical care, placing limits on out-of-pocket expenses. Beginning in 2014, certain health plans must cover 100 percent of the costs for medical care once a policyholder has reached either $6,350 on a single policy and $12,700 on a family plan.
In subsequent years, the maximum out-of-pocket (MOOP) for health plans that follow this regulation will vary based on medical inflation. This is intended to keep costs down for those who have purchased non-grandfathered plans, including plans inside and outside the marketplace.
All non-grandfathered health insurance plans (sold after the ACA was signed on March 23, 2010) on the individual, small group and large group markets are required to follow each of the regulations of health reform. If your policy was issued before March 2010, you will not experience many of the changes including the cap on out-of-pocket limits as determined by the law, though your plan will have its own MOOP.
However, for the first plan year beginning on or after January 1, 2014, if benefits are administered by two separate companies (for instance, if your medical benefits are provided by Aetna, and Humana administers your pharmacy coverage), there may be separate limits, or no limits on pharmacy benefits whatsoever.
This one-year safe harbor for separate service providers is an interesting piece of the law that applies to both small and large group markets, according to the HHS.
According to an Anthem health reform fact sheet, “The Departments have said that, only for the first plan year beginning on or after January 1, 2014, where a group health plan or group health insurance issuer uses more than one service provider to administer benefits that must apply the yearly limit on out-of-pocket maximums, separate out-of-pocket limits can be used.”
“More than one service provider” means any vendor or administrator responsible for the administration of a set of essential health benefits, including a pharmacy benefit manager. Rules may vary by carrier for this one-year rule. Anthem’s prescription plans that do not have a MOOP in place, for instance, are not required to have one until 2015, meaning that certain policyholders won’t meet their pharmacy limit for that year.
The company indicates that their 2014 prescription plans do have an out-of-pocket limit on the individual and small group market.
The HHS says that separate service providers cannot have a deductible higher than the annual limit on cost sharing. Service providers that already had a MOOP are able to enforce that out-of-pocket limit through 2014, yet no OOP maximum can exceed the annual limit on coinsurance, copays and deductibles.
For example, major medical can have an out-of-pocket limit of $6,350 and dental can have an out-of-pocket limit of $6,350 is the plans had an out-of-pocket cap beforehand.
While that may add confusion to health plan shopping, it only lasts for a year, and starting in 2015, all plans will total their out-of-pocket limits into one number.
Out-of-pocket expenses include copayments, deductibles and coinsurance, but not monthly premiums. As these add up, you may or may not reach the limit as outlined by the health law, or your grandfathered plan.
Deductible Limits Under Health Reform
An annual limit on deductibles also begins in 2014, but only applies to non-grandfathered, fully-insured small group plans, unlike the out-of-pocket limit rule.
Starting in 2014, this type of policy can have a yearly deductible no greater than $2,000 for an individual and $4,000 for a family. After 2014, the deductible limit for fully-insured small group plans purchased after March 2010 will increase by the “premium adjustment percentage” released each year, or in other words, the cost of medical care that causes a general premium increase.
These limits apply to small group plans issued for an effective date of January 1 2014 or later, and are not applicable to plans purchased before 2014, or in individual or large group markets.
In the individual market, deductibles are still widely varied in order to provide a fair range of costs to customers. Find a health plan on or off the exchange that fits your budget through our quote engine, or call an agent with your questions at 888 803 5917.