Out-Of Pocket Expense Limits Under the Affordable Care Act
By: Robert Pusateri, Capstone Brokerage Benefits Consultant, December 15, 2014
The Affordable Care Act has changed many things about how Americans will be covered under health insurance policies. One of the major changes in the Affordable Care Act is the limits that are now set forth by the law pertaining to the max out-of-pocket expense.
What is the Out-Of Pocket-Maximum that is now in place under the Affordable Care Act?
Currently for health plans that are not self-funded, and began after January 1st, 2014, the max out of pocket is $6,350 for an individual, and $12,700 for a family.
In 2015 the Out-of-pocket max will increase to $6,600 for an individual and $13,200 for a family.
So what does this mean to Americans?
Basically, what the max out-of-pocket limits mean is that under the Affordable Care Act, no individual on a group or individual health plan (that is non-grandfathered), will be required to pay more than $6,600 in 2015 for in-network essential health benefits.
What are is included in out-of-pocket expenses?
Out-of-pocket expenses are often referred to as cost sharing, which is the amount that an insurer will pay towards the health services that they need.
HealthCare.gov states,
“The share of costs covered by your insurance that you pay out of your own pocket. This term generally includes deductibles, coinsurance, and copayments, or similar charges, but it doesn’t include premiums, balance billing amounts for non-network providers, or the cost of non-covered services.”
Starting in 2015 ALL cost sharing amounts must accumulate to these out-of-pocket maximum amount, as long as they are in-network and covered services. In 2015 this will begin to include the co-payments for prescription medications.
How will this affect my insurance policy’s premium?
Once the requirement was set forth, health insurance plans are now required to be compliant. This particular part of the law will affect insurance premium in one of two ways: A cost increase in the premium will occur to account for cost sharing or your out-of-pocket limit may increase to this new set standard if it was previously lower.
Prior to the passing of the Affordable Care Act there was not a maximum out of pocket limit in place across all policies. Each insurance plan may have had a different limit. The insurance carrier or your individual or company insurance administrator will be able to provide more detailed information on how this will take affect. As always, having a knowledgeable agent or broker will prove beneficial to transitions under healthcare Reform and the Affordable Care Act.
