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Future of cap on OOP under Obamacare
Old 01-30-2014, 04:54 PM   #1
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Future of cap on OOP under Obamacare

It seems there is some legal cap of $12700 under the Obamacare law on how much the OOP can go. My question is going forward in 2015 2016 and beyond will the $12700 go up every year and be linked to inflation? Or will it stay at $12700? Or it will be indexed to some health care cost inflation index? I guess the same question on Obamacare legal caps on deductibles.
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Old 01-30-2014, 05:51 PM   #2
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If I am not mistaken, I believe that it is linked to the same OOP maximum under existing HSA provisions. Tends to increase each year.

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Old 01-30-2014, 07:32 PM   #3
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If I am not mistaken, I believe that it is linked to the same OOP maximum under existing HSA provisions. Tends to increase each year.

-gauss
I'm fairly certain that the HSA maximum is tied to the Federal government's inflation calculation.
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Old 01-31-2014, 12:11 PM   #4
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ACA caps on OOP and deductible are currently tied to the HSA cap. The HSA cap changes each year based on the medical care component of the Consumer Price Index for Urban Consumers (CPI-U) published by the U.S. Department of Labor rounded to the nearest $50. The Tax Relief and Health Care Act of 2006 changed the HSA inflation adjustment year-end to March 31.

2015 estimates are $6750 (individual) and $13,500 (family).

For 2015, HHS proposes to calculate the increase using projections of average per enrollee private health insurance premiums from the National Health Expenditure Accounts (NHEA), which is calculated by the CMS Office of the Actuary. We believe these figures are the most comprehensive, accurate, and transparent figures available in the timeframe we require to set this percentage each year. http://www.cms.gov/CCIIO/Resources/F...nt-notice.html
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Old 01-31-2014, 12:38 PM   #5
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A key point to remember is that this was set by Congress and can be changed by Congress. I am expecting an "outcry" soon on people not being able to afford the copays and deductibles for their heath care. From a practical standpoint, a person with few or limited resources and a $6,750 deductible on their health care plan really doesn't have heath insurance. I saw an article recently that 50% of the US live paycheck to paycheck. Where are they going to come up with $6,750 or $13,500 to cover their OOP? The current law provides some relief in the form of subsidies but there is still a significant gap between what people can/will pay and their resources.

I'm not trying to make this into a politcal discussion but it is a wild card to consider. Laws change which makes it dangerous to predict the status quo too far into the future.
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Old 01-31-2014, 02:09 PM   #6
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ACA caps on OOP and deductible are tied to the HSA cap. The HSA cap changes each year based on the medical care component of the Consumer Price Index for Urban Consumers (CPI-U) published by the U.S. Department of Labor rounded to the nearest $50. The Tax Relief and Health Care Act of 2006 changed the HSA inflation adjustment year-end to March 31.

2015 estimates are $6750 (individual) and $13,500 (family).
I see. Thanks for info. But if 2014 it is 6350/12700, and it is 6750/13500, it looks like a jimp of 6.3% which is way more than CPI-U.
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Old 01-31-2014, 02:11 PM   #7
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A key point to remember is that this was set by Congress and can be changed by Congress. I am expecting an "outcry" soon on people not being able to afford the copays and deductibles for their heath care. From a practical standpoint, a person with few or limited resources and a $6,750 deductible on their health care plan really doesn't have heath insurance. I saw an article recently that 50% of the US live paycheck to paycheck. Where are they going to come up with $6,750 or $13,500 to cover their OOP? The current law provides some relief in the form of subsidies but there is still a significant gap between what people can/will pay and their resources.

I'm not trying to make this into a politcal discussion but it is a wild card to consider. Laws change which makes it dangerous to predict the status quo too far into the future.
I agree with you. Although my understanding is that there is a difference between deductible and OOP. I believe the $6750 is the OOP and not deductible which would be lower. So the insurance would start paying at a lower number beyond the deductible which still could be a number that is too high but not as high as $6750.
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Old 01-31-2014, 02:16 PM   #8
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I agree with you. Although my understanding is that there is a difference between deductible and OOP. I believe the $6750 is the OOP and not deductible which would be lower. So the insurance would start paying at a lower number beyond the deductible which still could be a number that is too high but not as high as $6750.
Deductible may be equal to (most Bronze Plans) or lower (e.g. Gold, some Silver Plans) than OOP max , but cannot be higher.

AFAIK, IRS has not yet released actual HDHP OOP max for 2015 yet. This estimate puts the 2015 figure at $12,900 (family)-
http://finance.yahoo.com/news/hsa-co...120000737.html
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Old 01-31-2014, 02:34 PM   #9
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I see. Thanks for info. But if 2014 it is 6350/12700, and it is 6750/13500, it looks like a jimp of 6.3% which is way more than CPI-U.
"based on the medical care component of the Consumer Price Index for Urban Consumers (CPI-U)"

Health care costs often rise more than CPI-U. FWIW, the BLS' experimental CPI-E index is designed to more accurately reflect the expenses of the elderly.

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Old 01-31-2014, 02:52 PM   #10
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Originally Posted by gauss View Post
"based on the medical care component of the Consumer Price Index for Urban Consumers (CPI-U)"

Health care costs often rise more than CPI-U. FWIW, the BLS' experimental CPI-E index is designed to more accurately reflect the expenses of the elderly.

-gauss
You are right. Sorry, I missed that. Thanks for pointing that out. This is very useful information.
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Old 01-31-2014, 05:04 PM   #11
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Here's graph of MC CPI for past decade. Fortunately, the 10yr trend seems to be positive for consumers.

CPI: Medical Care Cost
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Old 01-31-2014, 06:14 PM   #12
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Originally Posted by kmt1972 View Post
I agree with you. Although my understanding is that there is a difference between deductible and OOP. I believe the $6750 is the OOP and not deductible which would be lower. So the insurance would start paying at a lower number beyond the deductible which still could be a number that is too high but not as high as $6750.
Also, low income people are eligible for cost sharing subsidies.
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Old 01-31-2014, 07:49 PM   #13
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A key point to remember is that this was set by Congress and can be changed by Congress. I am expecting an "outcry" soon on people not being able to afford the copays and deductibles for their heath care. From a practical standpoint, a person with few or limited resources and a $6,750 deductible on their health care plan really doesn't have heath insurance. I saw an article recently that 50% of the US live paycheck to paycheck. Where are they going to come up with $6,750 or $13,500 to cover their OOP? The current law provides some relief in the form of subsidies but there is still a significant gap between what people can/will pay and their resources.

I'm not trying to make this into a politcal discussion but it is a wild card to consider. Laws change which makes it dangerous to predict the status quo too far into the future.
Even though the deductible is high, it might still help a person/family from being totally destroyed from a major medical event since the insurance kicks in after the deductible. Better $6,750 than $100,000 for immediate care of a major event.
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Old 02-03-2014, 05:01 PM   #14
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Yup, it puts a bad medical event into the same range as a car accident with liability only coverage. Still not good if you are living paycheck to paycheck, but it isn't going to push someone into bankruptcy all by itself.

I do think that there will be a lot of outcry over the high deductibles over the next couple of years though. There are a lot of people that are going to expect that having insurance means that they shouldn't get a bill.


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Even though the deductible is high, it might still help a person/family from being totally destroyed from a major medical event since the insurance kicks in after the deductible. Better $6,750 than $100,000 for immediate care of a major event.
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Old 02-03-2014, 05:07 PM   #15
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Even though the deductible is high, it might still help a person/family from being totally destroyed from a major medical event since the insurance kicks in after the deductible. Better $6,750 than $100,000 for immediate care of a major event.
Absolutely!
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Old 05-14-2014, 07:39 AM   #16
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HHS has released the final numbers for 2015 ACA OOP maximums: $6600 individual/$13200 family.

The 2015 maximum OOP for HSA qualified plans is $6450/$12900. Therefore, we may see Bronze plans with an OOP over the HSA eligible limit. The annual HSA contribution limit increases $50 to $3350.

Source: Reminder: ACA's Out-of-Pocket Limits Differ from HSA-Qualified HDHPs Starting in 2015 | Proskauer's ERISA Practice Center Blog
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