The card says MOOPs: HHS fights back w/some interesting points about deductibles & co-pays

(MOOP: Maximum Out-of-Pocket expense; please forgive my Seinfeld reference.)

When it comes to healthcare policy cost trends, my main focus has been on the average premium rate increases, which currently look (if approved as requested) like they'll go up around 22% on average next year on the individual market (perhaps half that for the small group market).

However, the other major cause of hand-wringing when it comes to healthcare costs these days are deductibles and co-pays...the out-of-pocket expenses which people may have to pay in addition to their premiums. Again, co-pays are a flat fee (usually $30-$50) which you have to pay for many doctor visits, while deductibles are the amount which you may have to pay towards various healthcare treatments/services before the insurance carrier actually starts to chip in their 60-90% of the bill. I don't think co-pays have really changed much over the years, but a whole lot of people feel that deductibles have shot up a lot since the ACA went into effect.

You'll note that I've included a lot of caveats in the paragraph above, with good reason: The HHS Dept. just released a new report which makes some interesting arguments that the "Deductibles Out of Control!" claims are misleading, via three main arguments:

  • First, because of the Cost Sharing Reduction provision of the ACA, which chops deductibles/co-pays down to size for those below 250% FPL on Silver plans (around 6.4 million people, or 57% of ACA exchange enrollees), the median actual deductible for exchange enrollees is $850 (which is either low or high depending on how you look at it, but is far lower than the $5,000+ figures which are being talked about)
  • Second, because the ACA requires that exchange policies cover a variety of services at zero cost whatsoever--no deductibles, no co-pays, zilch. I've written about this before, and it's true...although there's a major caveat: Make sure the treatment is categorized as a PREVENTATIVE visit, NOT as "diagnostic", or you'll end up getting billed for it after all.
  • Third, because the ACA also places an absolute ceiling on out-of-pocket costs, aka MOOP. Once you hit that cap, you aren't supposed to be charged one dime more for deductibles/co-pays for the year.

Now, there are a couple of importantant caveats to this new report which come to mind right off the bat:

  • First, none of of the data provided includes the 13 state-based exchanges. That means 25% of the picture is missing, although I believe Covered California's numbers are supposed to be pretty impressive, so my guess is that including the SBEs would only make these numbers look better.
  • Second, and more importantly, none of the data provided includes the 8 million or so off-exchange enrollees, who are enrolled in policies either identical to (or similar to) exchange-based ones...but without any of the financial assistance or some of the protections. That means these folks have to pay full price for both their premiums and deductibles/co-pays.

Aside from that, I don't have time for an in-depth analysis today, so I'm just gonna post their press release and link to the report for your consideration:

Median Marketplace Deductible only $850
Marketplace Enrollees are in Plans with Lower Deductibles, More Covered Health Services than Commonly Understood

Consumers enrolled in a 2016 Health Insurance Marketplace plan have moderate deductibles and access to a number of covered health services before reaching the deductible, according to a new analysis released today by the Centers for Medicare & Medicaid Services (CMS). The median individual deductible is $850 for Marketplace policies, and consumers’ plans have an average of seven covered services before the deductible.

“This report shows that Marketplace plans are providing consumers with real financial protections and access to important health services,” said Health Insurance Marketplace CEO Kevin Counihan. “As with premiums, Marketplace deductibles and out-of-pocket costs in Marketplace plans are often lower than advertised thanks to the financial help available. And most plans cover common health services, like primary care visits and generic drugs, with no or low cost-sharing before consumers meet their deductibles.”

A health plan’s deductible is the amount the consumer needs to pay for certain health care services before the health insurance plan begins to pay. Deductibles can be an important factor in an individual’s plan choice. This year, implemented new tools such as an out-of-pocket cost calculator and doctor lookup function to help consumers find a plan that meets their needs and budget. The analysis released today takes into account the fact that about 60 percent of Marketplace consumers receive financial assistance that reduces their deductibles, and other cost sharing obligations. The median Marketplace deductible decreased from 2015 to 2016.

In addition, all Marketplace plans cover certain preventive services such as cancer screenings, immunizations and well-child visits without cost-sharing. Most plans also cover other commonly used health services either without cost-sharing or with low copayments, even if a consumer has not met the deductible. This means that even though a health plan has a deductible, many consumers face no or low cost sharing for the services they use frequently. Nationally, Marketplace plans cover an average of seven types of services before the deductible, most commonly prescription drugs, primary care or specialist visits, and outpatient mental health services.

These findings on the moderate cost-sharing levels in Marketplace plans are consistent with other data showing that Marketplace policies are providing consumers with access to care and financial protection. For example, Marketplace consumers report accessing health services, including check-ups, physician services, and prescription drugs, at rates similar to consumers with employer-sponsored coverage. Nationally, median out-of-pocket costs (taking into account premiums, deductibles, and other cost sharing) for consumers purchasing health coverage through the individual market fell by 25 percent between 2013 and 2014, when the Health Insurance Marketplace and other individual market reforms in the Affordable Care Act took effect.