Guest blog by TriNet. The original article can be viewed here.
In the 30-plus plus years I have been dealing with medical benefits in the field of Human Resources, one of the most confusing features of medical plans has always been the “out-of-pocket” (OOP) maximum. Thankfully, the Affordable Care Act (ACA) has put an end to the confusion felt by millions of insured people by standardizing the types of expenditures that must be counted toward the OOP maximum on all group health plans.
If you polled a room full of medically insured people and asked them which of their medical expenses count toward their OOP maximum, you would probably hear “I am not sure, I think everything” or “I know my deductible and coinsurance count, right?” The multitude of confused answers would be astounding. Many of these same people, after reviewing their current plan, would be amazed at how wrong they are.
The reason OOP maximums are such an enigma is because, in the past, there was no standard rule for what counted toward the maximum and most plans differed in what was allowed. One of the regulations taking effect for 2015 plans forces all medical insurance carriers to standardize their plans. This means that the four most common medical expenses people pay will be consistently counted toward their OOP maximum, no matter what insurance plan they carry. These expenses include in-network deductible, coinsurance and copays for essential health benefits, including prescription copays.
Say, for example, someone has a medical condition that requires them to utilize several medical services and they choose to use in-network providers. They would probably start by visiting their primary care physician, which may require a $25 copay. That doctor may prescribe medication that carries a copay of $10. A subsequent MRI may need to be performed, at a copay of $150. Then, if they need surgery, they could be looking at a $1,000 deductible, with a bill of $3,000 for the coinsurance portion of the hospital bill. So, at this point, how much do you think this patient paid toward the OOP maximum? In plans prior to the new regulation, only their $3,000 coinsurance amount would count toward the OOP, as their plan may not have allowed the deductible or copay to count. Many patients found this fact confusing and frustrating, to say the least. Now, under ACA, figuring out what counts toward the OOP maximum is easy – all of the above costs are included!
I have heard over and over again through the years from upset people who are surprised to find out that they still need to pay for an expense they thought was covered under their OOP maximum. This is a victory for people plagued with massive medical bills and anyone who has ever been confused about how OOP maximums work. Standardizing the types of expenses that count toward the OOP maximum will reduce confusion but if you want to avoid unexpected medical bills, it’s always a good idea to check with your insurance carrier or review your plan’s certificate of coverage before accessing medical services.