New Rule May Help Those Punished for Being Sick

By Max Friedman 

Senior Woman Lying Down In Hospital BedOne of the primary aims of the Affordable Care Act (ACA) was to stop punishing people for being sick, yet many are still very vulnerable to rising deductibles, especially as part of family coverage.

That could change with a new rule proposal from the Obama Administration that seeks to protect patients who hit their individual limit.

The ACA prohibited insurance carriers from discriminating based on a patient’s preexisting health conditions, limited the amount of out of pocket expenses a person would be responsible for in a year, and eliminated lifetime maximum limits.

Currently, the in-network total of deductibles, copayments and coinsurance for an individual is $6,600 a year. After that point, the carrier pays 100 percent of the total costs of medical care for the law’s essential health benefits, covering most services. The limit for a family is $13,200.

However, many plans were waiting until an entire family has reached their limit of $13,200 before covering the rest.

Starting next year, individuals wouldn’t be responsible for costs more than the individual annual maximum spending limit, which is set to increase to $6,850. So even if a family has a $13,700 maximum limit, no one in the family will have to pay for care after the individual threshold is met.

This change will help families with one sick family member in an otherwise healthy family. While some family health plans already had per-person spending limits, 68 percent of workers with a maximum out of pocket limit were in plans with a single overall family limit, according to the 2014 Kaiser Family Foundation employer health benefits survey.

Pushback from Employers 

This proposal is facing resistance from employers, who would now be required to pay the medical costs of individuals who reach their annual individual limits.

The ERISA Industry Committee released a letter to key administration officials arguing that “the new cost-sharing limit shifts medical costs to employers for individuals who have not reached, and might never reach, the umbrella limit… Many employers face a major plan design change or revision to the pricing structure to accommodate the additional cost.” They, and Republican Congressional leaders, are pushing the Administration to withdraw the new rule.

The cost burden of health care is being shifted a bit back onto insurers and employers, pushing back on the recent trend of increased personal costs through high deductible plans.

Protecting Consumers 

The change adds a new protection for sick people. JoAnn Volk, a senior researcher at Georgetown University’s center on Health Insurance Reforms, says “this is an incredibly important protection for people who have significant health care costs… this brings a whole new level of assurance that they didn’t have before the Affordable Care Act.”

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