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Analysis questions value of ACA deductible cap

Originally posted February 14, 2014 by Bruce Shutan on https://ebn.benefitnews.com

In a sign of just how difficult it is to rein in out-of-pocket costs, 35% of 2014 bronze-level plans in the Small Business Health Options Program exchange had deductibles that exceeded suggested annual caps under the Affordable Care Act. The conclusion was based on a HealthPocket analysis of government data from small group health plans in 32 states.

Another key finding was that the lowest level of coverage generated the highest possible costs. A whopping 96% of 2014 bronze-metal SHOP plans, for example, had deductibles of more than the ACA’s $2,000 individual and $4,000 family limits. That same result wasn’t nearly as prevalent for silver or gold plans (28% and 6%, respectively, for individuals and 88% and 6%, respectively, for families), nor was it an issue at the platinum level.

At the bronze level, the medical deductible for an individual enrollee averaged more than twice the amount of the original deductible limit at $4,216 and $8,667 for family coverage, while the annual cap on out-of-pocket costs averaged $6,224 for an individual and $12,518 for a family.

Any strict enforcement of the deductible caps could have substantially narrowed the inventory of health plans in the SHOP exchange, according to the study, which found that fewer than 4% of bronze-tier plans would have satisfied the ACA limits for individual and family enrollees. Small group plans are able to exceed the deductible caps only under the condition of necessity.

“The government effectively abandoned the deductible cap since it would prevent a significant minority of plans from meeting their actuarial value requirements,” explains Kev Coleman, head of research and data at HealthPocket, Inc. and a co-author of the study. He says the U.S. Department of Health and Human Services indicated in February 2013 that these deductible limits must be “applied so as to not affect the actuarial value of any health plan.”

But if the first few months of the HIX marketplace are any indication, there could be changes made that force plans to be re-designed. The study noted that if the deductible cap waivers are removed from future regulations, “then almost all qualified bronze plans would have to decrease their deductibles to satisfy the limits. Decreased deductibles could, in turn, require increases in other categories of enrollee cost-sharing such as co-payments in order for the plans to maintain their actuarial values.”

Last August, U.S. Rep. Tom Reed (R-NY) introduced H.R. 2995, which would eliminate the deductible caps for SHOP marketplace plans. The bill, which was referred to the House Committee on Energy and Commerce, has five co-sponsors.