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Topics: Obamacare

Another Obamacare delay: Out-of-pocket caps will have to wait until 2015

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Beltway Confidential,Philip Klein,Obamacare,Health Care,Analysis,The New York Times

One of the main arguments supporters of President Obama’s health care law have been making in response to reports of skyrocketing insurance rates for consumers in many states is that at least they’ll be getting more for their money. Specifically, supporters have touted the law’s limits on annual out-of-pocket costs. “(E)ven if you opt for a bronze plan,” the New Republic’s Jonathan Cohn wrote, “the law will limit what you pay in out-of-pocket expenses to $6,350 for an individual.”

But it turns out this is yet another provision of Obamacare that will be delayed.

The New York Times reports:

In another setback for President Obama’s health care initiative, the administration has delayed until 2015 a significant consumer protection in the law that limits how much people may have to spend on their own health care.

The limit on out-of-pocket costs, including deductibles and co-payments, was not supposed to exceed $6,350 for an individual and $12,700 for a family. But under a little-noticed ruling, federal officials have granted a one-year grace period to some insurers, allowing them to set higher limits, or no limit at all on some costs, in 2014.

The grace period has been outlined on the Labor Department’s Web site since February, but was obscured in a maze of legal and bureaucratic language that went largely unnoticed. When asked in recent days about the language — which appeared as an answer to one of 137 “frequently asked questions about Affordable Care Act implementation — department officials confirmed the policy.

The article goes on to explain that, “a consumer may be required to pay $6,350 for doctors’ services and hospital care, and an additional $6,350 for prescription drugs under a plan administered by a pharmacy benefit manager.”

What’s more, “Some consumers may have to pay even more, as some group health plans will not be required to impose any limit on a patient’s out-of-pocket costs for drugs next year. If a drug plan does not currently have a limit on out-of-pocket costs, it will not have to impose one for 2014, federal officials said Monday.”

This revelation couldn’t come at a worse time for the law. Right now, administration officials right up to Obama are engaging in a furious effort to convince Americans — especially young Americans — to purchase insurance. But one of the major selling points to younger Americans is that even if they’d be paying more for insurance under the health care law, their financial exposure would be more limited in the event of unexpected medical costs due to the law’s consumer protections. Yet if their potential out-of-pocket exposure remains high, what reason will young and healthy Americans who don’t qualify for generous enough subsidies have to purchase costly health insurance?

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Philip Klein

Commentary Editor
The Washington Examiner