2015 Obamacare Rate Filings Reveal Changes in Out-of-Pocket Costs

07-14-14

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2015 Obamacare Rate Filings Reveal Changes in Out-of-Pocket Costs

Average Deductible Amount for each of the four metal plans in 2015 - HealthPocket

As rate filings for 2015 Affordable Care Act health plans become public, virtually all media attention has focused on premium changes. What have been ignored are the changes in the plans’ out-of-pocket expenses. Inasmuch as deductibles and physician fees have the potential to add thousands of dollars in annual healthcare expenses, media disregard of health plan cost-sharing is especially unhelpful to the portion of the public who uses healthcare services regularly.

For Affordable Care Act plans, cost-sharing for healthcare services is governed by a plan’s actuarial value. An actuarial value is the percentage of anticipated medical expenses that a plan will pay with the remainder covered out-of-pocket by the plan enrollees. A bronze plan has an actuarial value of 60%, a silver plan 70%, the gold plan 80%, and a platinum plan 90%. However, in practice this does not mean that a bronze plan will pay 60 cents of every dollar in healthcare expenses. Actuarial values are calculated across all enrollees for the plan, so some individual enrollees will pay a higher percentage of healthcare expenses for deductibles and copayments than the actuarial value suggests while others will pay less.

HealthPocket examined major out-of-pocket cost categories within public rate filings for 2015 Affordable Care Act plans in 9 states.1 When compared to out-of-pocket costs for 2014,2 deductibles in the early public rate filings decreased with the exception of platinum plans. For bronze plans, the decrease was less than one percent as compared to 9% and 12% decreases for silver and gold plans respectively. Platinum plans had a major increase (43%) in in its average deductible.

The annual limits on out-of-pocket costs for covered medical services was more uneven when comparing 2015 early filings to 2014 averages. Bronze and gold plans had the maximum out-of-pocket costs increase while silver and platinum plans had decreases to their maximums (see tables below). For 2015 Affordable Care Act health plans, the government has raised the maximum allowable amount of out-of-pocket costs for covered medical services to $6,600.3 In 2014, the maximum allowable limit is $6,350.

Expenses for doctor and specialist visits also changed differently among metal plans. In the 2015 bronze plan rate filings, copayment fees were more common than a coinsurance charge where a patient was charged a percentage of the overall cost of the doctor visit. In 2014, the reverse was true for bronze plans. Coinsurance fees remained the most common charge for specialist visits among these plans, and that fee increased by 17% within the rate filings.

Silver and gold plans both saw decreases in doctor and specialist fees. Platinum plans, in contrast, saw expenses in both of those categories rise within the 2015 rate filings.

Out-of-Pocket Costs by Metal Tier

The tables below summarize the differences between 2014 and 2015 out-of-pocket costs for each of the Affordable Care Act metal plans.

Bronze Plan

Cost-Sharing Category2015 Averages from Early Rate Filings2014 AveragesDifference
Deductible (Individual)$5,058$5,081<1% decrease in deductible
Doctor Visit$3930% of doctor visit expense charged as coinsurance fee (coinsurance fees used for doctor visit in 54% of plans)In 2014, a percentage of the overall cost was the most common charge vs. a flat fee in 2015. Office visit retail costs depend on various factors including duration and severity of issue. For example, a visit for a minor issue by an established patient averages $83 versus $387 for a new patient with a complex issue.4
Specialist Visit35%30% of specialist visit expense charged to patient as coinsurance fee17% increase in coinsurance fee amount
Maximum Annual Out-of-Pocket Costs$6,387$6,2672% increase in maximum out-of-pocket costs

Silver Plan

Cost-Sharing Category2015 Averages from Early Rate Filings2014 AveragesDifference
Deductible (Individual)$2,659$2,9079% decrease in deductible
Doctor Visit$29$329% decrease in copayment amount
Specialist Visit$52$567% decrease in copayment amount
Maximum Annual Out-of-Pocket Costs$5,589$5,7302% decrease in maximum out-of-pocket costs

Cost-sharing for silver plans available to people making up to 250% of the Federal Poverty Level (FPL) was not included in the averages due to the special eligibility requirements for these plans.

Gold Plan

Cost-Sharing Category2015 Averages from Early Rate Filings2014 AveragesDifference
Deductible (Individual)$1,127$1,27712% decrease in deductible amount
Doctor Visit$22$248% decrease in copayment amount
Specialist Visit$41$4611% decrease in copayment amount
Maximum Annual Out-of-Pocket Costs$4,434$4,0819% increase in maximum out-of-pocket costs

Platinum Plan

Cost-Sharing Category2015 Averages from Early Rate Filings2014 AveragesDifference
Deductible (Individual)$497$34743% increase in deductible amount
Doctor Visit$19$1619% increase in copayment amount
Specialist Visit$31$303% increase in copayment amount
Maximum Annual Out-of-Pocket Costs$1,624$1,85512% decrease in maximum out-of-pocket costs

Actuarial Value Not a Reliable Indicator of Out-of-Pocket Costs

When comparing major cost-sharing categories among metal plans, we see that the metal plans’ out-of-pocket costs do not align closely with the metal plans’ differences in actuarial value. Designing health plans around actuarial values was originally intended to simplify shopping5 but the comparison in average cost sharing demonstrates that the average expenses among deductibles, doctor fees, specialist fees, and other out-of-pocket costs do not change in ways consistent with differences in actuarial levels.

The below table illustrates how out-of-pocket costs change compared to the metal tier that proceeded it.

Metal PlanActuarial ValueDecrease in DeductibleDecrease in Doctor Visit ChargeDecrease in Specialist Visit ChargeDecrease in Annual Out-of-Pocket Limit
Bronze Plan60%N/AN/AN/AN/A
Silver Plan70%47%26%N/A*12%
Gold Plan80%58%24%21%21%
Platinum Plan90%56%14%24%63%

* The bronze plan had a coinsurance fee while the silver plan had a flat fee copayment amount.

As the table above demonstrates, changes in deductibles and physician copayments do not change proportionally with the actuarial value changes among metal tiers.

Conclusion

Available data from the public 2015 rate filings reveal the changes in out-of-pocket costs are not following a consistent trend among the different metal plans. Differences in plan actuarial value is not necessarily helpful in understanding how out-of-pocket costs will differ. However, it is unclear whether this state of affairs will continue as more states release their rate filings to the public.

The rate filings process itself is problematic with respect to consumer transparency. Not all states have released their filings. In order for consumers to have a meaningful role in the process of American healthcare reform, data such as health insurance rate filing documents should be made available for public scrutiny prior to approval of rates. Moreover, a standardization of the rate filings in a format that allows for easy loading into data analysis tool would speed the ability of researchers to provide initial data analyses to the public for their review and potential improvement.

METHODOLOGY

Data in this study regarding health plans was derived from qualified health plan rate filings within the individual and family health insurance market for the calendar year beginning January 1, 2015. Cost-sharing data was collected for bronze, silver, gold, and platinum plans in the individual health insurance market. Small group, large group. Medicare, and other health plans outside the individual market were not included in this study. On-exchange stand-alone dental plans were also excluded from this study. The cost-sharing categories examined were deductibles, annual limits on out-of-pocket costs, and fees for doctor and specialist visits. Other cost-sharing categories such as prescription medication co-payments, Emergency Room charges, or co-insurance fees for major medical procedures were not included in this study. All out-of-pocket costs assume covered medical services delivered by in-network healthcare providers.

Rate filings were gathered from the following states:

  • Arizona
  • Connecticut
  • Indiana
  • Maine
  • Michigan
  • North Carolina
  • Rhode Island
  • Tennessee
  • Virginia

Rate filings must be approved by the state department of insurance and, as such, may be rejected or may require alteration before final approval is given to the health plan. Disapproved or withdrawn filings were not included in the study. When discrepancies existed within the filings, plan attributes entered as inputs within the actuarial calculations were given privilege.

All out-of-pocket costs assume in-network delivery of covered medical services and no reduction in cost-sharing due to income-based government subsidies.

AUTHORS

This analysis was written by Kev Coleman, Head of Research & Data at HealthPocket, and Jesse Geneson, data researcher at HealthPocket. Additional data collection and analysis was performed by Katherine Bian. Correspondence regarding this study can be directed to Mr. Coleman at kevin.coleman@healthpocket.com.

Kev Coleman on Google+
Jesse Geneson on Google+

Sources:

1States were limited to ones that made rate filings available to the public for review. The states examined were: Arizona, Connecticut, Indiana, Maine, Michigan, North Carolina, Rhode Island, Tennessee, and Virginia.
2Kev Coleman and Jesse Geneson. “Deductibles, Out-Of-Pocket Costs, and the Affordable Care Act” HealthPocket.com (December 12, 2013). /healthcare-research/infostat/2014-obamacare-deductible-out-of-pocket-costs
3“Fact sheets: HHS 2015 Health Policy Standards Fact Sheet.” CMS.gov. (March 5, 2014). http://www.cms.gov/Newsroom/MediaReleaseDatabase/Fact-sheets/2014-Fact-sheets-items/2014-03-05-2.html
4Data obtained from Healthcare Bluebook. Office visit, established patient, level 2: $83.https://healthcarebluebook.com/page_ProcedureDetails.aspx?id=224&dataset=MD&g=Office+Visit%2c+Established+Patient%2c+Level+2 Office visit, new patient, complex issue: $387. https://healthcarebluebook.com/page_ProcedureDetails.aspx?id=222&dataset=MD&g=Office+Visit%2c+New+Patient%2c+Level+5
5The Centers for Medicare & Medicaid services have asserted that Actuarial Value categories, along with Essential Health Benefits standards, “will significantly increase consumers’ ability to compare and make an informed choice about health plans… “Metal levels” will allow consumers to compare plans with similar levels of coverage, which along with consideration of premiums, provider networks, and other factors, help the consumer make an informed decision.” http://www.cms.gov/CCIIO/Resources/Fact-Sheets-and-FAQs/ehb-2-20-2013.html

 

 

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