Although the Patient Protection and Affordable Care Act is expanding health coverage to millions, the minimum coverage people will be required to buy starting in 2014 will have higher cost-sharing than the typical employer-based plan, according to a report from the Kaiser Family Foundation (pdf).
The report looked at estimates of the potential cost-sharing levels for health plans that will be available in the non-group market when the healthcare reform law goes into effect in 2014. Under the PPACA, health plans in the non-group and small markets must have certain actuarial values and are divided into four groups: bronze, silver, gold and platinum.
Bronze plans, the minimum plan people would have to buy, must have an actuarial value of 60 percent. This means the plan, on average, would pay 60 percent of the costs for covered benefits, and enrollees would have to shell out the remaining 40 percent through cost-sharing, such as deductibles, co-payments and co-insurance.
The KFF looked at two cost-sharing examples to see what a person would have to pay out-of-pocket. A bronze plan with 20 percent co-insurance, which the KFF marked as a typical coverage level today, and an out-of-pocket cost-sharing limit of $6,350 would have a deductible of $4,375. If the patient co-insurance was increased to 40 percent, the deductible would be reduced to $3,475. "Under both scenarios, the deductibles are significant and would be considered catastrophic plans, particularly for people without significant personal savings," according to the report.
Although people will have the option of buying different coverage and applying for cost-sharing subsidies to reduce out-of-pockets costs, the authors said lawmakers will eventually have to find the right balance between a baseline level of required insurance and an "appropriate level of protection."
The report looked at estimates of the potential cost-sharing levels for health plans that will be available in the non-group market when the healthcare reform law goes into effect in 2014. Under the PPACA, health plans in the non-group and small markets must have certain actuarial values and are divided into four groups: bronze, silver, gold and platinum.
Bronze plans, the minimum plan people would have to buy, must have an actuarial value of 60 percent. This means the plan, on average, would pay 60 percent of the costs for covered benefits, and enrollees would have to shell out the remaining 40 percent through cost-sharing, such as deductibles, co-payments and co-insurance.
The KFF looked at two cost-sharing examples to see what a person would have to pay out-of-pocket. A bronze plan with 20 percent co-insurance, which the KFF marked as a typical coverage level today, and an out-of-pocket cost-sharing limit of $6,350 would have a deductible of $4,375. If the patient co-insurance was increased to 40 percent, the deductible would be reduced to $3,475. "Under both scenarios, the deductibles are significant and would be considered catastrophic plans, particularly for people without significant personal savings," according to the report.
Although people will have the option of buying different coverage and applying for cost-sharing subsidies to reduce out-of-pockets costs, the authors said lawmakers will eventually have to find the right balance between a baseline level of required insurance and an "appropriate level of protection."
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