Wednesday, October 28, 2009

Putting caps on what you pay for health care

Putting a cap on how much one pays in out-of-pocket expenses for health care is a big debate now in Washington D.C. As a part of the US health care bill package, both the house and senate have established different price caps on what people would pay per year for health care.

To sift through some of the plans and debate, we go to this McClatchy Newspapers story written by David Lightman,

According to the American Journal of Medicine study, out-of-pocket medical costs averaged $17,943 for all medically bankrupt families in 2007 -- $26,971 for uninsured families and $17,749 for those who had private insurance at the outset.

The House bill would cap annual out-of-pocket medical expenses at $5,000 per individual and $10,000 per family starting in 2013. New plans offered through new employers, as well as policies sold through the proposed health insurance exchange, a marketplace where consumers can compare plans and prices, would be subject to limits.

Most employers today offer policies with limits on out-of-pocket expenses. Under Senate proposals, existing employer plans would be exempt from the limits, but the House would require employer plans to have caps in place by 2019.

The Senate legislation would tie the annual out-of-pocket limits to those that exist under current law for health savings accounts, which will be $5,950 and $11,900 in 2010 but should increase by the time new rules would go into effect in 2013 under the proposed legislation.

Out-of-pocket expenses are expected to include co-payments for medical services and prescription drugs, deductibles and co-insurance, though premium payments wouldn't count toward the out-of-pocket maximum.

Once a consumer reached the limit, his or her plan would pay 100 percent of further expenses.

"This is a pretty significant improvement," said Linda Blumberg, an economist at the Urban Institute, a center-left Washington research group.

The health insurance industry disagrees.

"We don't believe a cap is the best way to control rising health care costs," said Robert Zirkelbach, a spokesman for America's Health Insurance Plans, the industry trade group.

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