New Federal Standards For Marketplace Plans May Reduce Out-Of-Pocket Spending
Some consumers who buy coverage on the health insurance marketplaces in 2017 could see their out-of-pocket costs drop significantly under a federal proposal to create standardized plans, a recent analysis found.
The government wants to create six plan options at the bronze, silver and gold metal levels, each with standard deductibles, maximum out-of-pocket spending limits and copayments or coinsurance for various services. In addition, primary care and specialist doctor visits and prescription drugs would not be subject to the deductible in the standard silver- and gold-level plans. Consumers in those plans would generally make a flat copayment for those services from the beginning, such as $30 for a primary care visit, instead of owing the entire amount until they meet their deductible for the year.
The change is part of the government’s proposed regulation that sets out the benefit standards for plans sold on the health insurance marketplaces in 2017.
Because insurers wouldn’t be required to offer standardized plans under the government’s proposal, it’s unclear whether the new plans would be widely available or if they would carry significantly higher premiums than other marketplace offerings.
The change could benefit people who have few health care expenses as well as those with pricey medical conditions who usually meet their annual out-of-pocket spending limit, said Caroline Pearson, a senior vice president at Avalere.
With a typical silver plan deductible of nearly $3,000 this year, a relatively healthy person may pay hundreds of dollars monthly in premiums, yet still owe the entire bill for most medical services he receives during the year, except for preventive care, which is covered for free.
If the deductible doesn’t apply to some services, “people feel like they’re getting a benefit from their insurance,” Pearson said.
On the other hand, people with chronic conditions who owe hefty annual bills for drugs or other treatment wouldn’t have to pony up the entire out-of-pocket maximum amount in the first month or two of the year. Standard model plans would spread out their spending, Pearson said.
This year, two-thirds of silver plans sold on the marketplaces covered primary care visits before the deductible is met, similar to the proposed standard plans, the Avalere analysis found. But for other services, coverage before this point was much less routine. Only a third of silver plans covered specialist visits before the deductible was reached, while the cost of generic drugs was subject to the deductible in half of plans, and three-quarters of plans required enrollees to pay off their deductible before the plan paid for specialty drugs.
Silver plans are the most popular plans on the marketplace.
“We oppose this type of standardized benefit,” said Clare Krusing, a spokesperson for America’s Health Insurance Plans, a trade group. “If consumers only see a one-size-fits-all product, how is that providing them with the tailored coverage they want and need?”
The final regulation is expected within the next month, Pearson said.