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A closer look at Out-of-Pocket Max
Old 11-17-2013, 10:42 AM   #1
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A closer look at Out-of-Pocket Max

Has anyone read much about the ACA's definition of Out-of-Pocket Max? I know that the dollar amount can vary greatly (from $500 to $6250, from what I've seen to-date.) But I'm interested in the definition. That is, what does or does not "count" towards the calculation of reaching your Max.

For example, premiums do not count. They didn't before the ACA, and they still won't. Also, services that the plan does not cover, like some elective surgeries, will not count. And, balance-billing for out-of-network providers will not count.

Here's where things may have changed: I believe that, under the new law, ACA-compliant plans have to include just about everything else in determing whether you've reached your OOPmax. That will now include: deductibles, co-insurance, and co-payments. In other words, you may reach your OOPmax much sooner than you would have in most pre-ACA policies, because they typically excluded these expenses.

The newly defined ACA OOPmax is sometimes referred to as a "true" OOPmax. Can anyone provide a sound reference or link to support (or debunk) my interpretation? Thanks!
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Old 11-17-2013, 11:39 AM   #2
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Out-of-Pocket Maximum—How It Works and Why to Beware

That link toward the bottom of the article tells how the OOP Max works now with ACA.

Also, I did a comparison between 3 plans and it really doesn't seem to be worth it to go with anything other than the cheapest Bronze plan. Comparing a Bronze (the one I'm going with) to a Silver with lower deductible and then a Platinum plan, the yearly premiums are $7320, $11,796, $17.676, respectively. If you compare them all maxed out (say someone needed heart surgery on all plans), the Bronze still is cheaper by $150/yr. There is hardly any situation in between where you could come out ahead by spending more per month for a 'better' plan, because that $$ you're 'saving' with the better plan you are SPENDING on that better plan. Then if you're relatively healthy and rarely go to the doctor, you can save $10K per year on the bronze plan. Another factor not even included in the above is that the bronze is an HSA, so the tax savings + additional subsidy by putting $6,500 into a HSA can save you (rough calculation) up to $1,600/yr! (I think I did it figuring 25% tax bracket along with just plugging the #'s into a calcuator to see how much more in subsidy I'd get taking $6,500 off our income) ... anyway, my point is: Go Bronze!!!!!
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Old 11-17-2013, 11:41 AM   #3
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** I take that back - I had figured a 15% tax bracket in that $1600 figure. (My other post is pending moderation ... )
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Old 11-17-2013, 11:59 AM   #4
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The website healthinsurance.about.com I believe states that copays, coinsurances, and deductibles are counted by the ACA as applying toward your OOP max.

It talks about them in terms of someone receiving a cost sharing subsidy, but sounds like the same logic applies if one is not getting a subsidy.
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Old 11-17-2013, 12:48 PM   #5
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Yes, about.com has a pretty good summary, Out-of-Pocket Maximum—How It Works and Why to Beware

I think one issue for 2014 was if you had a plan with a different insurer for your drug plan, both could have an OOPM.
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Old 11-17-2013, 04:29 PM   #6
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Thanks jowi, John, and rbmrtn, for your links and insight! An insurance rep I had called in October had concerned me. She said that, even after I meet my deductible and OOPmax in 2014, I "will still always owe any copays or coinsurance, through the end of the contract year...that's how it's always been." I think her reasoning is not valid. "How it's always been" no longer applies!

Of course, if there really is a conflict between what my new contract says and what the ACA says, then that would make the plan non-compliant. That seems unlikely. Still, better to address it now rather than later.

Thanks again.
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Old 11-17-2013, 04:46 PM   #7
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One other thing is grandfathered plans, which don't have to meet the new requirements.
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Old 11-17-2013, 07:42 PM   #8
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Quote:
Originally Posted by jowi View Post
Out-of-Pocket Maximum—How It Works and Why to Beware

That link toward the bottom of the article tells how the OOP Max works now with ACA.

Also, I did a comparison between 3 plans and it really doesn't seem to be worth it to go with anything other than the cheapest Bronze plan. Comparing a Bronze (the one I'm going with) to a Silver with lower deductible and then a Platinum plan, the yearly premiums are $7320, $11,796, $17.676, respectively. If you compare them all maxed out (say someone needed heart surgery on all plans), the Bronze still is cheaper by $150/yr. There is hardly any situation in between where you could come out ahead by spending more per month for a 'better' plan, because that $$ you're 'saving' with the better plan you are SPENDING on that better plan. Then if you're relatively healthy and rarely go to the doctor, you can save $10K per year on the bronze plan. Another factor not even included in the above is that the bronze is an HSA, so the tax savings + additional subsidy by putting $6,500 into a HSA can save you (rough calculation) up to $1,600/yr! (I think I did it figuring 25% tax bracket along with just plugging the #'s into a calcuator to see how much more in subsidy I'd get taking $6,500 off our income) ... anyway, my point is: Go Bronze!!!!!
jowi,
Are you not taking into consideration the premium subsidies and cost sharing subsidies? I've been comparing the Bronze and Silver at Highmark Blue Shield and have decided (for now) that a Silver is better for me because my low income in 2014 will greatly reduce the cost sharing I am responsible for and also my premium. The bronze plans I am able to get are about 20 percent cheaper in premiums, but they have no cost sharing (only Silver have cost sharing) and I'm only going to pay around $100 or $200 a month for the Silver premiums anyway. The Silver plans all have max oop's of $3,500 to $6,350 but I will only be responsible for a max of $2,250 oop per year, no matter which Silver plan I choose. Sounds too good to be true, must be a catch somewhere, but that's what I'm seeing on the healthinsurance.about.com website.
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Old 11-17-2013, 07:46 PM   #9
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Are you not taking into consideration the premium subsidies and cost sharing subsidies?
This is true. If you expect to receive considerable cost-sharing, it may be worth paying up for silver (especially if it doesn't eliminate HSA eligibility). In most other cases, I think if you can afford the self-insurance and your expected usage of health care is moderate or less, Bronze would be a better deal with no cost sharing in play.
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Old 11-18-2013, 07:18 AM   #10
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No, I was comparing just the premiums / subsidies or not. Cost sharing changes that and if you qualify for those, then it might be worth it to go with a Silver if you're going to be likely to use a lot of it.

BUT, Ziggy, for everyone else, it pretty much doesn't even matter if you're someone who WILL use it or not, because while you might like a plan with a lower deductible, but you might pay so much more for the monthly premiums that they make up that entire difference *and then some*.

If it were the case that with a Platinum vs. a Bronze plan you'd pay $700 more per month on premiums BUT in a worst-case scenario, you'd actually pay LESS for the Platinum overall - THEN I could see the 'gamble' aspect of 'take the Bronze if you feel you will be healthy or can 'self-insure' but take the Platinum if you're sick argument. But that's not how the plans I've compared are. You pay your much greater premium, and then when you add up the OOP max to the premiums, the Bronze is STILL CHEAPER. So there's no gamble - it's a no brainer.

** Plans I'm sure vary around the country. But this was also the case with my other insurance I looked at last year when I chose my plan.

*** There might be some benefits to going with a *slightly* more expensive plan that has a drug copay or something where you'd be better off with NOT the bottom plan. All I'm saying is really ... break out that calculator and run the numbers
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Old 11-18-2013, 07:52 AM   #11
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Quote:
Originally Posted by jowi View Post
No, I was comparing just the premiums / subsidies or not. Cost sharing changes that and if you qualify for those, then it might be worth it to go with a Silver if you're going to be likely to use a lot of it.

BUT, Ziggy, for everyone else, it pretty much doesn't even matter if you're someone who WILL use it or not, because while you might like a plan with a lower deductible, but you might pay so much more for the monthly premiums that they make up that entire difference *and then some*.

If it were the case that with a Platinum vs. a Bronze plan you'd pay $700 more per month on premiums BUT in a worst-case scenario, you'd actually pay LESS for the Platinum overall - THEN I could see the 'gamble' aspect of 'take the Bronze if you feel you will be healthy or can 'self-insure' but take the Platinum if you're sick argument. But that's not how the plans I've compared are. You pay your much greater premium, and then when you add up the OOP max to the premiums, the Bronze is STILL CHEAPER. So there's no gamble - it's a no brainer.

** Plans I'm sure vary around the country. But this was also the case with my other insurance I looked at last year when I chose my plan.

*** There might be some benefits to going with a *slightly* more expensive plan that has a drug copay or something where you'd be better off with NOT the bottom plan. All I'm saying is really ... break out that calculator and run the numbers
That's what I'm discovering - for the unsubsidized case.

Even in the worst cases, with really high medical bills, the silver plan with lowest deductible and max OOP comes out ahead of the Bronze plan I favor, but only by $197 in total annual costs!!! I'm willing to take that bet - save $2,400 or more in years with no medical bills but chance spending just a couple hundred more in years with high medical bills.

I'm not even looking at the gold or platinum, because the premiums are soooo much higher. Usually another $100 a month at least.

Also, if you are looking for a cheap doctors visit copay or cheap drug copay, not only are you probably paying considerably more in premiums for the "privilege", but you are also forfeiting the ability to have an HSA account and the resulting savings in taxes.
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Old 11-18-2013, 08:12 AM   #12
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One other thing is grandfathered plans, which don't have to meet the new requirements.
Right. If I were to keep my current plan, the new rules wouldn't apply. It's grandfathered. That's why I'm one of those who don't want to keep it. The new rules and new plans benefit me, because I've found one with a very low deductible and OOP max -- and I have high med expenditures. I will exceed the deductible when I fill my first prescription in January! I haven't met a deductible in over ten years, so this will be an interesting experience.
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Old 11-18-2013, 09:15 AM   #13
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Even in the worst cases, with really high medical bills, the silver plan with lowest deductible and max OOP comes out ahead of the Bronze plan I favor, but only by $197 in total annual costs!!! I'm willing to take that bet - save $2,400 or more in years with no medical bills but chance spending just a couple hundred more in years with high medical bills.
That's pretty close to what I saw. I could construct scenarios where the silver plan (even without cost sharing) came out a little better, but for the most part they are unlikely for most people. Pretty much everyone who can set several thousand aside for the OOP max is going to be better off with the bronze plans.

And anything above silver seems like a sucker's bet for anyone who can self-insure higher deductibles, especially since you lose the HSA eligibility above the silver level. That's even more true for people who are getting tax credits (or could become eligible for them with a slightly lower MAGI).
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Old 11-18-2013, 10:55 AM   #14
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That's pretty close to what I saw. I could construct scenarios where the silver plan (even without cost sharing) came out a little better, but for the most part they are unlikely for most people. Pretty much everyone who can set several thousand aside for the OOP max is going to be better off with the bronze plans.

And anything above silver seems like a sucker's bet for anyone who can self-insure higher deductibles, especially since you lose the HSA eligibility above the silver level. That's even more true for people who are getting tax credits (or could become eligible for them with a slightly lower MAGI).
ERs usually have considerable savings set aside already, so hopefully that money is essentially set aside for folks who are already retired.

And in the meantime, if you are healthy, you can set aside the savings from the lower premiums to build a fund that might be needed in a high expense year.

Over the last 13 years, I had one procedure that hit my deductible. Other than that, insured medical expenses have been $500 or less, and would have come out of pocket in any plan.
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Old 11-18-2013, 11:06 AM   #15
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If it is a family plan you really have to watch, who counts towards total oop.
Some plans two people have to hit say 5000 before the total oop kicks in.
I believe this may be somewhat tricky.
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Old 11-18-2013, 11:07 AM   #16
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This also leads me to believe the it WON'T be just the lower income people choosing the less expensive Bronze plans. There should be many wealthier folks who have the savings and feel comfortable taking on more of the self-insurance role in exchange for lower premiums - especially the healthier folks.

Seems like many discussions have assumed that only lower income folks would go Bronze - but I don't see why.

In choosing our health insurance we are seeking:
- negotiated pricing with providers
- a reasonable provider network (this is a big deal for us)
- annual limits to max OOP (the true insurance part)

I will be very annoyed if silver or higher plans end up having a "better" network than the bronze. This doesn't seem to be true in TX at the moment as all metals list the same network with each insurance company.

We're OK buying off the exchange as we don't qualify for any subsidies. If there is a difference between provider networks off and on exchange, we can adjust.
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Old 11-18-2013, 11:52 AM   #17
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If it is a family plan you really have to watch, who counts towards total oop.
Some plans two people have to hit say 5000 before the total oop kicks in.
I believe this may be somewhat tricky.
Old Mike
I have never heard this? Do you have more details about what you mean? I do know that for a family plan if one person ('individual') gets sick and nobody else goes to the doctor all year, the sick 'individual' still has to meet the FAMILY deductible or FAMILY OOPM for at least the HSA plans if not most of the cheaper plans (so-called aggregate deductible).
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Old 11-18-2013, 12:06 PM   #18
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Don't have any specific links just go into plans for your state and look between
bronze and silver plans. There is even variation between say silver plans between providers.
Also copay and coinsurance differences,glad I am on medicare, much easier to deal with.
OM
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Old 11-19-2013, 03:47 PM   #19
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I checked with BCBS TX today.

In-network deductibles and max OOP and out-of-network deductibles and max OOP are treated separately, so they are essentially additive. If you use a combination of in and out-of-network providers you could end up with a much higher deductible and max OOP.

Out-of-network limits aren't even required by the ACA, so a policy doesn't have to provide those limits, and some don't. The BCBS TX PPO plans do offer limits even for out-of-network. You still aren't protected from balance billing of course.
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Old 11-20-2013, 09:28 PM   #20
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Perusing the bcbstx network I found this gem about out-of-network for doctors in in-network hospitals. Armed with this, I can make a much better choice!

I looked at the spreadsheet for "The Valley area" - tells me which hospitals to avoid! Provider Finder - Maximize your Benefits
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