ObamaCare Mandate Delay a Blessing
ObamaCare regulations limiting patients’ annual out-of-pocket medical spending have been postponed for a year. New York Times columnist, Robert Pear explains:
[T]he administration has delayed until 2015 a significant consumer protection in the law that limits how much people may have to spend on their own health care.
The limit on out-of-pocket costs, including deductibles and co-payments, was not supposed to exceed $6,350 for an individual and $12,700 for a family.
The Washington Post dismissed the holdup as little more an accounting problem.
However, this particular “consumer protection” actually harms consumers. Consumers ultimately pay the cost of health coverage directly or indirectly ― as premium hikes and reduced wages. The market should be free to find the best allocation.
A recent value-based plan design tested by the California Public Employees’ Pension found that when patients are given control over the marginal cost of their care they become price conscious shoppers and significantly lower costs for themselves and their employer.
Becoming price conscious and doing personal due diligence in this regard is important. It should be promoted more and restricted less.
Maybe it will continue getting delayed until the entire thing is struck down…
Is it just a guess or do you have a reason why you think that?
A guess but based on how stagnant Washington is in implementing anything nowadays. Lots of obstacles everywhere.
Yeah, but I am not sure that because there are a lot of obstacles it won’t be implemented.
That would be nice, but until Obama leaves office I don’t think it will help.
“However, this particular “consumer protection” actually harms consumers. Consumers ultimately pay the cost of health coverage directly or indirectly ― as premium hikes and reduced wages. The market should be free to find the best allocation.”
Market based solutions always beat government regulatory solutions.
Always? I don’t know about that.
Economic lags cause the government to be slower than the market most of the time, and I only say most because there are exceptions to every rule.
My primary concern with the Our-of-Pocket Maximum is that it removes the only tools health plans have to motivate consumers to be more cost-conscious. For example, it’s my experience that an MRI (or a CT scan) can vary in price from $400 to several thousand — depending on where you get it. A hip replacement can vary from $12,000 to $85,000.
Only when patients know they will be responsible for excess costs will they look for ways to reduce their (and their employer/health plan’s) costs.
For their part, health plans need to assist enrollees in knowing where to shop. When I needed an MRI, why would my insurer not tell me that hospitals are expensive ($3,000) while several radiology clinics near my office charge only $400?
Im ok with Obamacare being delayed indefinitely.
Medicare B has no out-of-pocket maximum and never has.
That means seniors have not had this protection for the past 47 years.
Delaying the out-of-pocket maximum in Obamacare is at least consistent with Medicare. Maybe it will end up being deferred for 47 years?
Devon is correct to wonder why reference pricing is taking so long to catch on. Part of the reason might be that assembling and communicating price data to insureds does cost money, and maybe the smaller insurers are unwilling to spend that money.
There may also be some behind the scenes lobbying pressure from hospitals against insurers. Transparency would shut down the profits that hospitals make on overpriced outpatient care.
As for the out of pocket maximums that were proposed in the ACA:
there are a small number of persons each year who get cancer or need multiple surgeries, and their medical bills soon exceed $200,000.
But until now, it has been legal to market health insurance with lower caps than that. This has been especially true of college health plans and mini-med plans in the retail sector.
So the patients and their relatives wind up holding bake sales to raise money for chemotherapy.
There is something repulsive about cancer patients needing to hold bake sales in a country as rich as ours. The ACA may have had the wrong solution, as it does in so many other areas, but it is a problem to deal with.
We have car insurance to pay for catastrophic accidents, or replace the vehicle if totalled. We have home insurance to replace high cost items or the home if destroyed. The costs that cause patients to require a bake sale are not everyday doctor’s visits, minor preventive care and the like. It makes more sense to cover large catastrophic accidents and illnesses, rather than lower ticket health items.
This also requires the patient to be a consumer and discuss reasonable recommendations with the physician, much like a conversation with your auto mechanicic, ie, what needs to be done now, and how much will it cost?
I’m confused.
The maximum out-of-pocket limits for 2013 for a HSA-eligible High-Deductible Health Plan (HDHP) is $6,250 for an individual and $12,500 for a family. For 2014, the limits will be $6,350 and $12,700.
These limits are defined annually as per the 2003 Medicare Modernization Act, not the 2010 PPACA. Does this mean that PPACA’s regulatory burden makes it impossible for insurers to bear the risk of even HDHPs? Or do we expect that this means only that the barebones, indemnity plans will have another year’s grace period?