Dear Addy: Maximum Out-of-Pocket Expenses
Are there any guarantees that maximum-out-of-pocket expenses won’t continue to rise under the ACA? What, if anything, restricts such a rise?
Maximum-out-of-pocket expenses are likely to continue to rise year-after-year. In fact, under the ACA, if the average cost of insurance premiums rises on a per person basis in the US, then out-of-pocket maximums will rise too. If the average cost of insurance premiums does not rise, then out-of-pocket maximums will remain the same until the average cost does rise. Here is a more extensive explanation:
For plan or policy years beginning in 2014, the annual limit on out-of-pocket costs under Affordable Care Act (ACA) is $6,350 for individual coverage and $12,700 for family coverage. But the ACA requires that these limits be updated annually. The limits will be based on the percent increase in average per capita premiums for health insurance coverage called the “premium adjustment percentage” as described under Affordable Care Act section 1302(c)(4).
According to the ACA, the premium adjustment percentage for any calendar year is “the percentage by which the average per capita premium for health insurance coverage in the United States for the preceding calendar year exceeds such average per capita premium.”
For example, if the average health insurance premium cost per person increases by 6% in 2014, then the annual limit on out-of-pocket costs is increased by 6%. In this example the rise would mean the annual limit on out-of-pocket costs in 2015 would be $6,731 for individual coverage and $13,462 for family coverage. On the other hand, if the insurance premium cost per person stayed the same or decreased, there would be no change to the annual limit on out-of-pocket costs.
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HFA frequently receives questions from the bleeding disorders community related to advocacy issues. The questions often impact the entire community. In an effort to reach the largest audience possible with our responses to these widely applicable questions, HFA developed “Dear Addy.” Questions submitted to this column are edited in order to protect privacy and should be considered educational only, not individual guidance.
Assisting and Advocating for the Bleeding Disorders Community