What Is The Out of Pocket Maximum You Will Pay Under the PPACA?
There are quite a few blogs in the blogosphere who tend to get the PPACA wrong and conflate the issues of it well beyond what is reasonable and truthful. Maybe they just do not know what the facts are and miss the benefits of the PPACA to dwell on the negatives exclusively. Many tend to dwell on the amount of money one has to pay out in insurance and deductibles, what the PPACA does not do, and why we should go back to . . . ahh nothing? For the record, the PPACA is not single payer nor is it even universal healthcare. It is a convenient compromise which has many positives which did not exist previously. Some thoughts for those who think differently . . .
Maggie Mahar at The Health Beat Blog: “Even if you do not qualify for a subsidy, your out of pocket spending is capped at about $5,500 for an individual; $12,000 for a couple. (That includes deductible and co-pays under a Bronze plan–or any other plan).
A couple earning $65,000 joint might not have $12,000 lying around –especially if they were young. But they could work out a payment plan with the hospital or surgeon– paying, say $5,000 up front as a sign of good faith, and $7,000 over time. If they had to, they could borrow the $5,000 from relatives or friends or a credit card.(These days it’s pretty easy to get a credit card that charges 0% interests on cash withdrawals for 6 months to a year).
Bottom line: they don’t lose their house, and they don’t go bankrupt. A $12,000 bill is the worst that can happen to them, even if they’re in a horrible accident and in the hospital for 3 months.
There will also be no annual limit or lifetime limit on how much the policy will pay out.
This is why the ACA is a boon—even for people who don’t qualify for subsidies. You can’t be ruined by medical bills, and they can stop paying even if you have a very expensive chronic disease.
As for poor people –if they’re below 133% of poverty, they’ll be on Medicaid (once all of the states expand Medicaid which, eventually, they will).If they’re above 133% of poverty, the subsidies are rich enough to make insurance comprehensive affordable.” Maggie Mahar in an email.
Families USA Foundation: Worry Less, Spend Less: Out-of-Pocket Spending Caps Protect America’s Families; “The Affordable Care Act initially sets the level of these new caps by referencing an existing definition—the annual out-of-pocket spending limits for high-deductible health plans that are associated with Health Savings Accounts (HSAs). If these caps went into effect in 2011,they would be $5,950 for individuals and $11,900 for families.” http://www.familiesusa2.org/assets/pdfs/health-reform/out-of-pocket-spending-caps/National-Report.pdf “Worry Less, Spend Less: Out-of-Pocket Spending Caps Protect America’s Families”
I am not a big fan of Barack Obama who wanders down the double yellow, weaving from one side to the other in attempts to secure his place in presidential history; but in the end, we are better off with the PPAC than what we had before “nothing.”
I have a $10K deductible. If I get sick tomorrow, I lose because I have nothing to pay the rest of the bills never mind the deductible. If my sweetie gets sick, same issue.
For this I pay $9432/year.
Even two people working have to figure out how to pay the bills while one is not working and cover the medical expenses on less than $65K with one sick.
Yeah, we have 2 business and we’re trying to figure out how to actually make money. I appreciate no life time caps, but…
Yeah the BFD is pretty weak tea given the problems with health care in the U.S. The biggest problem I have with it is that it used up a lot of political capital to prop up a system which would have collapsed within a few years if nothing had been done. So we get a little change which most people do not appreciate and substantially higher costs for a lot of people who had decent insurance and the rise of the Teabaggers who will fade from view but who have done a lot of harm the last few years.
The issue for me is RTGDB: Read the God Damn Bill (and then the passed legislation). Back in the heat of the moment Reactionaries were bleating ‘2000 page bill’ as if rewriting the rules for a huge (a sixth?) part of the economy could be done on a napkin a la Laffer Curve while Progressives were for the most part main-lining propaganda from Kip Sullivan and Physicians for a National Health Plan about how the who,e thing was a sell-out to Big Insurance.
Me I read the God Damn Bill. In fact all of them: House Tri-Committee, Senate HELP, the various abortive attempts of Senate Finance’s Gang of Seven Turned Six (shades of the Borg), Reid and Pelosi’s Marks and then the version as passed. Also the totally ridiculous HR676 with the misleading title “Medicare for All” (which it wasn’t). And you know it wasn’t that damn hard a lift, all the bills are double spaced (to allow for markups), in large type, with huge margins and equally huge chunks of boilerplate (cite the code section to be changed and then insert the new word or words). All in all the total amount of reading wasn’t more than Harry Potter and the Deathly Hollows, handily polished off by several millions of middle school students.
PPACA had and has a lot of moving parts with some parts stopping operation as the bill went through the process and others added. But it is astonishing to me how few people actually tried to grapple with the numbers particularly as to subsidies and such things as life time limits.
The key words (literally) from the beginning were ‘affordable’ and ‘available’. When PPACA is fully phased in would it be available? Well yes, once some Republican governors are bypassed on the expanding Medicaid issue. Will it be affordable? Well compared to the alternatives sure, in that few people will actually be priced out who have adequate insurance today, and lots of people will be priced in who currently can’t get continuing medical care at any price. Now are there exceptions? Yeah sure. But how many and by how much is a matter of Reading the Damn Law and doing some calculations. Yet mostly all I see if a prime demonstration of the principle “The Plural of Anecdote Ain’t Data”
It’s frustrating. Not least because I had no health care coverage at all during the period (I do now) and experienced the joys of a combination of charity care from the hospital and dunning notices from the doctors even as I was in the process of losing my house. Being uninsured was!’t some theoretical thing to me at all, and deals which postponed implementation from 2011 (original) to 2013 and 2014 were literally life threatening.
Burkean Hells indeed.
I value your ability to read the whole thing. Now please tell us what we missed.
Rhetoric ain’t data either.
Meanwhile I tend to agree with Terry. Here the “good enough” seems to be the enemy of “better.”
Maybe we really were never going to get ‘better,’ but Obama has yet to impress me as an honest broker.
Having read the same as Bruce did and capturing much of it, I would say there is much right about the PPACA as opposed to doing “nothing or going back to nothing.” It is not perfect and as I stated, it was a convenient compromise in Congress to pay something.
I don’t make my comments lightly regarding this Obama/Romney care. I’ve been following it for years. Google ACA subsidies and a number of calculators come up. At $80K/yr family of 3 your expected to shell out up to $19,800/yr for a silver plan, no subsidy. This is no different from a few years ago when I posted about the MassConnector site and putting number in here.
20 to 24% of one’s family gross is considered acceptable for premiums…then you get to the copays/annual caps.
When Mass passed their plan they knew at 350 to 450% of poverty those people would struggle. The data I have seen is now noting that Mass in order to control the state’s cost are driving down the level at which subsidies no longer get paid.
I am going to disagree. Go to the Kaiser Calculator here: http://kff.org/interactive/subsidy-calculator/ $80,000 with 1 child and no other issues:
Because your income is more than 4 times the poverty level, you would not qualify for subsidized exchange coverage. The information below is about unsubsidized exchange coverage.
Amount you pay for the premium:$7,953 (which equals 0.99% of your household income and covers 100% of the overall premium).
This is for Silver Plan and the total you would pay out is $19,953 which includes premiums. In order to payout the $12,000, you would have to incur a $40,000 bill overall and in one year. Premiums are $650 / month which is about what many are paying for an 80% plan. The $40,000 is not negotiated rate for the hospital or a doctor either. You could have open heart surgery for that amount at one of the top hospitals in Ohio in Mansfield.
Daniel, is it the best? Nope and it is a start the same as SS was when it came out. Imagine being stuck with the non-negotiated cost.
The question is how many people are really at 401% of FPL and not covered by employer ‘paid’ insurance.
I see a lot of special pleading at the margins that may effect thousands of people (at most) to ignore the tens of millions of people who would now have basic health coverage with no co-pays for preventive services.
And much like the Social Security debate a certain amount of folk discounting catatostropic coverage (a la SSDI) to zero as if no one in that over median income group could ever have an adverse event.
In 2006 I had a nearly gold plated health care plan. I was also a single man earning well over median HOUSEHOLD income with over $100k in house equity and right on track to retiring with a 60% of final three year average pension. With CIVIL SERVICe PROTECTION BABY! And a STRONG UNION in a BLUE STATE.
Bullet proof, en route to paying off my mortgage a few years before retirement, and planning on my SS benefit to just be that 30% of replacement income on top of the cake. And a diehard Social Security advocate.
Was that latter fact related to the as it turns out result of me being unemployed and deathly sick in charity care in a Catholic hospital in 2008 or having continuing medical bills and illness that ended up with me spending 2012 in a homeless shelter?. Well not exactly, nobody gave me a crystal ball back in 1997 when I started working this issue.
But I was trained as a historian and only idiots claim with your Friedman types that “it couldn’t happen to me” or that we should orient all social policy around what is called the “First World Problem” of folks making $80-250k.
The original Senate HELP bill was scored by CBO as extending health care coverage to 97% of Americans. And some people may have had resulting premiums squeezing their second home purchases. Excuse me for endorsing “Greatest Good for Greatest Number” (and being an all around grump)
Bruce and Run,
I’m not saying the ACA is not helpful. I’m just noting that the costs are going to be siginificant.
Yes, I did the Kaiser and a couple others before I did my posting. I’ve been to the Mass Connector multiple times over the last 3 years just to see. But just to be clear I did it again and I copy/paste the results:
2 adults, $80K, 56 and 57, 1 child (college):
Amount you pay for the premium:$16,313
(which equals 20.39% of your household income and covers 100% of the overall premium) You could receive a government tax credit subsidy of up to:$0
(which covers 0% of the overall premium) .
It says nothing about deductables in that $16K.
What it does say about deductables is:
Your out-of-pocket maximum for a Silver plan (not including the premium) can be no more than $12,500.
Go to the Mass connector. Over $57K you get no help. Put in the same data (thought income doesn’t matter at this level), I used zip 01504 and you get plans for $10K deductables for bronze from $1174 (it doesn’t even list the deductables and copays) to $1346 for the highest bronze. That’s $14K to $16K for premiums.
The least expensive silver plan: $19,632/year. Gee, just like the ACA!
There is this report: http://masscare.org/ma-health-reform-law/massachusetts-health-reform-in-practice/
And this on the Mass systems effect on medical bankruptcies:
In 2009, illness and medical bills contributed to 52.9% of Massachusetts bankruptcies, versus
59.3% of the bankruptcies in the state in 2007…Overall, the total number of medical bankruptcies in Massachusetts increased by more than one
third during that period. In 2009, 89% of debtors and all their dependents had health insurance at the time
of filing, whereas one quarter of bankrupt families had experienced a recent lapse in coverage.
Again, I’m not saying it’s all bad, but it is not the financial savior people want to believe it will be.
I’ve been paying for my own coverage since I graduated college. I’ve very aware of the cost of coverage and the changes happening over the years. In fact, my first “high deductable” plan was $2000/yr. That;s a gold plan in the Mass system for $26,880 per year.
Now I have patients coming in with that as their regular employer paid for coverage. In one example, both employed, different employers and $1500 each. And people are heralding the current slow down in health care costs.
$80K/year? Not so much it it’s taking 2 to do it. Of course, if these rates are based on net income, then we might have something here, but it’s not. Gross household income. Certainly, I assume a family can reapply if 1 of the earners gets sick and can’t earn for a while.
Again, I’m not saying it’s all bad, but it is not the financial savior people want to believe it will be.
To answer your one question on premiums. The MLR comes into play with premiums being too high. The insurance companies have to apply 85% (group) and 80% (individual) of it to actual healthcare of the insured person or family. Secondly and for age, the premium can only be 300% of the lowest cost and youngest of the insured (previously and similar to life insurance, it was 600 and 700 times the lowest cost). I do not believe the MA plan covers such and I can point to our own blog owner as to the size of rebate he received from his healthcare insurer.
I have a post coming up on the slowing of healthcare. Medicare is finally sustainable if we believe the Fed’s Sheiner and Follette.
300% of the lowest, puts that $16K I posted from the calculator in line with what you came up with.
I understand the 85%, but I’m not convinced it’ is going to lower premiums.
The issue is those above the 350% to 450/500% of poverty. I did some searching, and based on the census data only 65% of the insurered were via their employment. That leave an awful lot of people needing government subsidy or will be paying it 100%. When you consider the number of self employed, accepting that 20% of gross is ok to be now realocated to something that family was not spending it on will make for quite the shift in their lives.
For me, I will have to see if I get to keep my $9432 premium or if it goes up do to alignment of the plan with the ACA. If it goes up, I’ve got some major rethinking to do.
RTGDB – nice.
A couple of quick comments.
In the early stages of PPACA the enhanced coverages are being passed through to the original insured base – employers are getting larger premium bills and then passing higher deductibles and co-pays on to workers, in a backwards kinda way, a tax increase on a large swath of the middle class. This should be temporary, we hope.
My work takes a different direction though. In order for PPACA to work hundreds of thousands of providers are going to have to be integrated, realigned, reorganized, work through new revenue cycle models, create new employment models, adopt complex EMR systems, change to an ICD-10 coding system, rework operational models, establish new relationships with patients and payers, ……… all in about four years.
Not going well, not well at all…..
As I’m confident you are aware while all that realignment is going on in the back of the minds of everyone is how are they going to keep their financial/market advantage.
Certainly there is a lot of that thinking going on in the front of the minds as to how to survive the realignment.
As I told one of my way-left-of-center friends recently, bankrupt hospitals treat no one (he thinks any institution that handles more than a few hundred thousand dollars a year is inherently evil.).
We are all dependent on the outcome. If this becomes a train wreck no one benefits, except perhaps the government.
just exactly who is “the government”?