CMS Moves Forward With Rule On Out-Of-Pocket Limits

The CMS is sticking to its guns on the maximum out-of-pocket limits for medical care, stating Tuesday that members within families shouldn’t have to pay more than individual consumers.

The Affordable Care Act limits how much people have to pay out of pocket for deductibles, coinsurance and copayments. The maximum yearly amount is $6,850 for individuals, and $13,700 for families. Those costs apply to the mandated essential health benefits within every health plan’s network, which includes most major treatments and procedures such as hospitalizations and maternity care.

The federal government finalized its 2016 health insurance marketplace rule in February, which included the clarification to the out-of-pocket maximums for consumers. The rule said all people, regardless of whether they are in a family or individual health plan, will not have to pay more than the individual maximum for cost-sharing.

For example, a four-person family buys a health plan and has a $13,700 out-of-pocket limit for 2016. One of the family members gets sick and is stuck with a $20,000 bill from the hospital. Under the CMS rule, the family member would only have to pay the maximum $6,850, and the self-funded employer or insurer would have to cover the rest even though the family limit hasn’t been met.

Those limitations apply to individual, small-group, large-group and self-insured plans. The Labor Department released a document (PDF) in May further clarifying the policy.

Kevin Counihan, CEO of the Affordable Care Act’s health insurance marketplaces, said Tuesday the policy protected families from racking up burdensome medical debts.

“We believe that applying the individual $6,850 maximum … helps remedy the difficulty a consumer could face in paying up to $13,700 out-of-pocket for certain covered medical care under the plan because he or she purchased family coverage instead of self-only coverage,” Counihan wrote in a letter to employers. “It also prevents consumers from being penalized for purchasing family coverage rather than self-only coverage.”

Large employers have blasted the rule, especially self-funded companies, because it means the company or insurer will be on the hook for the rest of those costs. Employers also said the timetable for the change was impractical since most large group plans have already been set for the 2016 calendar year.

“Some of our members will be forced to spend millions of dollars to make this change,” Annette Guarisco Fildes, CEO of the ERISA Industry Committee, said earlier this summer in a letter to the House Committee on Energy and Commerce.

The ERISA Industry Committee, a lobbying group that represents large, self-funded companies, conducted a poll with half of its members. About 70% of the poll respondents said they would be “moderately or significantly affected” by CMS’ clarification of out-of-pocket maximums.

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