Short Takes On News & Events

What You Should Know About The Obamacare Delay On Some Out-Of-Pocket Caps

By KHN Editors

August 14th, 2013, 9:30 AM

The federal health law brings many big changes to the nation’s health system; in some ways the changes are spelled out in detail in the law, and in other ways we learn about them only as implementation proceeds.

As KHN’s Julie Appleby reported in April, and the New York Times reported yesterday, the law’s cap on out-of-pocket costs of $6,350 for individuals and $12,500 for families will not be enforced for some employer-based health insurance plans until 2015. Michelle Andrews followed the story KHN in June with more detail for consumers.

The Times played its story on page A1, which brought it to the attention of congressional Republicans, who blasted the move as one more reason the whole law should be delayed or repealed.

The measure, which is meant to give relief to some consumers with employer coverage and very high drug costs, will be more complicated to implement for employers who assemble health coverage plans from multiple insurers. Those employers have been given more time to comply with the new rule, so their employees will have to wait until 2015 for relief from high out-of-pocket costs. Others potentially affected by the delay won’t see higher costs, though, because many employer plans already have caps well below the law’s new limits. Furthermore, there is no delay on out-of-pocket maximums that will apply to all new plans sold on Obamacare exchanges and new plans in the employer market.

KHN continued to cover the story Tuesday with our partner NPR. KHN’s Julie Appleby appeared on “Here & Now,” and you can listen to that segment on the Here & Now website, clicking on “Another Obamacare Delay” in the audio player.

KHN’s Sarah Varney filed a story for “All Things Considered,” which you can listen to below.

In addition, KHN’s Mary Agnes Carey appeared on NPR’s “Tell Me More” to discuss this and other provisions of the health law that affect consumers.

One Response to “What You Should Know About The Obamacare Delay On Some Out-Of-Pocket Caps”

  1. Ray says:

    It’s important to note, this delay was announced in FEBRUARY, yes, half a year ago.

    No one noticed because it doesn’t matter. It was a concession made for companies that were having trouble getting their AV’s to fall into the prescribed metal tier “window” for lack of a better term (I.e. a silver plan has an AV of 70%, plus or minus 2%. If your plan came to 72.5%, you could raise the OOP to say, $6500, to bring it down to an even 72%).

    At the end of the day, the AV is still the same. The benefits are the same. The subsidy and premium should still be the same. The OOP was an arbitrary number thrown onto plans to make them realistic.

    To be honest, they just aren’t. The maximum OOP is only found on the cheaper plans, intended for those who can’t afford a better one, and are likely to get a subsidy. For a person making, say $35,000/yr, getting subsidized but still spending $3300/yr (a bit under 9.5%, so it’s “affordable”), paying another $6,350 basically doubles their cost. There is no way someone at that low of an income can swing nearly 10 grand in total costs, a third of their annual income, and still meet their other obligations.