Out of Pocket Limit?

[Youngster]

Looking for a health insurance policy, and came across the term "Out of Pocket Limit"(or"maximum"). I am a little confused with regard to the part that references "$6000 individual/$12,000 family". Everything is paid 100% after the limit is reached. The policy would be for my spouse and me (family of 2).

Here is my confusion. If I were to be hospitalized and the bill was $15,000, would I pay $6,000 or $12,000? Explanations would be appreciated.

 

[sengsational]

There was just a "clarification" made for ACA compliant policies. The individual OOPM must be "embedded", such that if one person on a family policy exceeds the individual OOPM, the insurance would start paying. That was NOT the case, generally, in 2014 and 2015....the individual OOPM was simply ignored on a family policy. That's the voice of experience talking.

 

[rodi]

Deductible is the amount where you pay (100%) until the limit is met.
OOP is higher - because most plans have a copay or coinsurance once you meet the deductible...

So first you meet your deductible, then you pay the smaller copay/coinsurance... and when you've paid out the max oop - you pay nothing.

 

[ivinsfan]

There was just a "clarification" made for ACA compliant policies. The individual OOPM must be "embedded", such that if one person on a family policy exceeds the individual OOPM, the insurance would start paying. That was NOT the case, generally, in 2014 and 2015....the individual OOPM was simply ignored on a family policy. That's the voice of experience talking.

Isn't it easier to just buy 2 policies if there are only 2 people in a family?

 

[Youngster]

Thanks sengsational. That is exactly what I asking. Sorry it did not apply to you in 2014-2015. Do you have a link for the "clarification"?

 

[bingybear]

Thanks sengsational. That is exactly what I asking. Sorry it did not apply to you in 2014-2015. Do you have a link for the "clarification"?

try this
in 2014-2015 some plans were embedded and some not.
Really look at the plan brochure, it should verify that it is embedded, likely in the deductible and OOP max.
Be careful that you use in network providers if you do need care as the OOP/deductibles could be higher or have no coverage except in case of a true emergency.

 

[sengsational]

Isn't it easier to just buy 2 policies if there are only 2 people in a family?

I wouldn't say "easier" due to billing overhead, two accounts, etc. But there would be no question whatsoever when it came to deductibles and out of pocket max.

I'm surprised it hasn't come up yet, but my experience indicates that there's no "volume discount" by grouping people on a family plan; separate policies were priced to sum to the family policy price.

 

[Youngster]

[...]
in 2014-2015 some plans were embedded and some not.
Really look at the plan brochure, it should verify that it is embedded, likely in the deductible and OOP max.
Be careful that you use in network providers if you do need care as the OOP/deductibles could be higher or have no coverage except in case of a true emergency.

Thanks for the link, and your response. This may be a dumb question; but, how can I tell from the plan brochure if the policy is "embedded"?

PS: I did find a reference in a footnote in the Plan Information and it does in part say "An individual family member will not exceed $6,850 for in-network out-of-pocket expenses within the calendar year." I guess that is the magic number per the new rule. Still would like to know what to look for to see if "embedded".

 

[ERD50]

Deductible is the amount where you pay (100%) until the limit is met.
OOP is higher -

Not always. Some plans have an identical deductible and OOP. It makes all those comparisons of X% co-pay moot, as you hit the max OOP at the same time as exceeding the deductible. So that % copay applies to a range of zero dollars.

And now I learn "$6000 individual/$12,000 family" doesn't mean "$6000 individual/$12,000 family"!

This is insane. - ERD50

 

[ivinsfan]

Not always. Some plans have an identical deductible and OOP. It makes all those comparisons of X% co-pay moot, as you hit the max OOP at the same time as exceeding the deductible. So that % copay applies to a range of zero dollars.

And now I learn "$6000 individual/$12,000 family" doesn't mean "$6000 individual/$12,000 family"!

This is insane. - ERD50

Better to learn it by reading here then experiencing it in real life. If you are a couple just write 2 policies to be safe.

 

[Youngster]

How would one get 2 spearate plans for husband and wife with the ACA subsidy?

 

[Youngster]

Another question. Does the new rule apply to non group policies as well? The link provided appears to discuss group policies. The policy I am seeking is just through the marketplace with no group involved.

 

[Katsmeow]

There was just a "clarification" made for ACA compliant policies. The individual OOPM must be "embedded", such that if one person on a family policy exceeds the individual OOPM, the insurance would start paying. That was NOT the case, generally, in 2014 and 2015....the individual OOPM was simply ignored on a family policy. That's the voice of experience talking.

So this would apply to an individual non-marketplace policy bought for 2016? This would be an ACA compliant policy. Wow, I had totally missed this in my consideration of a policy. This could be something important for me to model (we have one family member on the couple who tends to have higher health care needs with two not having high needs).

Better to learn it by reading here then experiencing it in real life. If you are a couple just write 2 policies to be safe.

Well, that depends. If you have one person who alone were to meet the out of pocket max (or deductible) for the two people and then the second person had some claims that wouldn't meet the deductible then it would be better to have both be on the same policy.

 

[photoguy]

In 2014, my wife and I were on two separate exchange plans (same provider but different metal levels). Dealing with the extra billing was a hassle but not too bad. But what killed us was dealing with billing and coverage errors which necessitated many phone calls to both coveredCA and the insurance company. We had issues with both accounts and spent a *long* time on the phone.

For 2015, we just consolidated and went to a single plan (after verifying embedded limits). Now that it's working smoothly, I don't want to touch it or do anything that might cause an error (because to fix it will mean spending hours on the phone).

 

[bingybear]

Thanks for the link, and your response. This may be a dumb question; but, how can I tell from the plan brochure if the policy is "embedded"?

PS: I did find a reference in a footnote in the Plan Information and it does in part say "An individual family member will not exceed $6,850 for in-network out-of-pocket expenses within the calendar year." I guess that is the magic number per the new rule. Still would like to know what to look for to see if "embedded".

In past years some of the plans were embedded and some aggregate (non-embedded). I think I remember 2 bronze plans from the same company with each having different type of deductibles/oop max. Some described the method verbally in a footnote or as part of the table. And make sure you read it for your plan, not just any plan in the brochure as (at least in previous year) they were sometimes different.

I wouldn't say "easier" due to billing overhead, two accounts, etc. But there would be no question whatsoever when it came to deductibles and out of pocket max.

I'm surprised it hasn't come up yet, but my experience indicates that there's no "volume discount" by grouping people on a family plan; separate policies were priced to sum to the family policy price.

From my experience there were no volume discounts even back before ACA for 2 people. I could be missing something of just my mind is slipping. However, I'm not sure that is true with 3 or more people. From what I've seen in the past the 3 or more did not just keep adding more to the family deductible and max OOP. However, I have not checked this post ACA as we are now a family of two. I just ran a dummy case adding a kid to a ACA price check (bronze plan-HDHP), deductibles and max OOP are the same as with the kid omitted. Try other cases if you like, but I think there is volume discounts... but you need 3 to qualify.

 

[frank]

when you write separate policies do each of you claim half the income> how does that work?

 

[Willers]

How would one get 2 spearate plans for husband and wife with the ACA subsidy?

Maybe someone else knows, but I haven't found a way to do this. Since it is in our interest to file a joint return I don't see a way to split the income for subsidy purposes. You could file separately, but for us that wasn't worth it.

I'd love an answer if someone has one.

 

[ziggy29]

Maybe someone else knows, but I haven't found a way to do this. Since it is in our interest to file a joint return I don't see a way to split the income for subsidy purposes. You could file separately, but for us that wasn't worth it.

You don't need to file separately in order to get separate policies. You do, however, need to file jointly to be eligible for the tax credits.

 

[MBSC]

Another question. Does the new rule apply to non group policies as well? The link provided appears to discuss group policies. The policy I am seeking is just through the marketplace with no group involved.

Yes, it applies to any 2016 ACA compliant plan. After the ruling was released, group plans requested clarification on if it applied to them also. The link is the response that yes it applies to group plans as well.

 

[MichaelB]

The ruling eliminating single aggregate [-]deductibles[/-] OOP limits went into force in 2015 for individual plans and will now apply in 2016 for group and other non-grandfathered plans. Here is an informative link with easy to understand explanations and a good example. Family Plans Must ‘Embed’ Out-of-Pocket Limits in 2016

 

[rodi]

How would one get 2 spearate plans for husband and wife with the ACA subsidy?

If your state uses Healthcare.gov (the federal exchange) you put in the household income that qualifies for the subsidy... go through the full eligibility, then when that's done - create "groups" - put one person in one group, put another in a different group.

However - I can tell you CoveredCa.com does NOT do this. You cannot get the tax credit in the form of premium subsidies up front and do groups. So we chose to forgo the pre-payment of the tax credit in order to give flexibility on multiple policies for our family. We'll get the money back when we file taxes. Far from optimal but my husband wanted a different carrier than we have for myself and the kids. The group thing works if you aren't doing a subsidy, but doesn't work if you qualify for the subsidy. (So I state an income higher, just to allow groups.)

 

[ivinsfan]

So this would apply to an individual non-marketplace policy bought for 2016? This would be an ACA compliant policy. Wow, I had totally missed this in my consideration of a policy. This could be something important for me to model (we have one family member on the couple who tends to have higher health care needs with two not having high needs).



Well, that depends. If you have one person who alone were to meet the out of pocket max (or deductible) for the two people and then the second person had some claims that wouldn't meet the deductible then it would be better to have both be on the same policy.

Yes that could be true, but if you have one person that always has high expenses you could buy that person a better policy with less out of pocket for a higher premium( this will usually result in somewhat lesser total costs) and the other person a cheaper policy with higher out of pocket and control some costs that way. One policy does means you are locked in the same coverage.

 

[Youngster]

Yes, it applies to any 2016 ACA compliant plan. After the ruling was released, group plans requested clarification on if it applied to them also. The link is the response that yes it applies to group plans as well.

Thanks. I re-read the link and I guess I did not read very carefully last night.

 

[Youngster]

I have another question. How does the limit work with regard to out of network providers.

For example, the policy I am considering has a limit of $13,100 for single and $26,200 for family for out-of-network providers. Logic would dictate that the same theory would apply. That is, that the limit would be $13,100 for a single person on a family policy. However, when it comes to this kind of thing, logic does not always apply.

The footnote I referenced in an earlier post says in pertinent part that "An individual family member will not exceed $6850 for in-network out-of-pocket expesnes within the calendar year." (emphasis added).

Anyone know the anwer to this question? This is a considerable factor in that sometimes you have no choice over whether your provider is in network, e.g., a hospitalization that requires the services of an anesthesiologist or radiologist who is not in network. Maybe I am over-reacting in that bills for those services may not be terribly significant and under deductible anyways. Also, it is my understanding (I could be wrong) that the two limits, in network and out of network would be combined, so the total exposure could be $26,000 + $6,850 for a total of $32,850, a sum too rich for my blood.

 

[audreyh1]

ACA doesn't have any rules for out-of-network limits. The insurer can specify whatever they want.