A Common Gal Looks at ObamaCare, Part 4: Your Cost Limits & Adjustments

I’m reading up on The Patient Protection and Affordable Care Act (“ObamaCare”). That includes the act itself, amendments passed shortly afterward, and the recent Supreme Court ruling. It’s a lot of pages (906, 55, and 193 respectively), but I want to understand it. I’m documenting my read-through here. I am not a lawyer or a healthcare professional, just a common college-educated person. These are my thoughts, not advice to you. Read the act yourself like the free person you are. ;o). Also note: This act refers a lot to “health care plans”; for simplicity’s sake, I sometimes just say “insurance” or “health insurance.”

Denser than Diamonds

Health plans can provide more than the minimum “essential health benefits” described in this subsection[1]. (I guess that “this subsection” means subsection (b) of Section 1302, but I’m not sure. Legalese is denser than diamonds but lots uglier and way less valuable.)

Limits on Your Cost-Sharing

There’s an annual limit on the insured person’s cost-sharing (for family or for self-only policies), beginning in CY2014.[2]

In this title, “cost sharing” includes[3]:

• Deductibles
• Co-insurance
• Co-payments or similar charges
• Any other expenditures required of an insured person if the expenditures are qualified medical expenses.

NOT included in that definition are[4]:

• Premiums
• Balance billing amounts for non-network providers
• Spending for non-covered services

How Premiums Can Be Raised

There are provisions[5] for premium adjustments starting in CY2015:

• For self-only coverage: The CY2014 premium will be multiplied by a “premium adjustment percentage” that I’ll talk about in a minute.
• For all other coverage (self plus spouse, self plus family, etc.): The CY2014 premium will be multiplied by that premium adjustment percentage AND THEN doubled.
• Rounding: If any of these increases are not a multiple of $50, they’ll be rounded to the next lowest multiple of $50.

Limits on Your Deductible Costs

There are annual limits[6] on deductibles for employer-sponsored plans in the “small group market” (with an exception I’ll mention in the next bullet point):

• Max of $2,000 for self-only coverage, starting in CY2014.
• Max of $4,000 for any other plan, starting in CY2014.
• Those limits on deductibles for employer-sponsored plans CAN be increased by the maximum amount of reimbursement which is reasonably available to a participant under a “flexible spending arrangement” per IRS rules. (I’m not sure what this means. I think it means if you have a health savings account you use each year with your insurance plan, they can increase your deductible up to the amount you’re allowed to squirrel away in that health savings account. Maybe?)
• Starting in CY2015, there are provisions[7]for increasing deductibles:
  • For self-only coverage: The CY2014 maximum will be multiplied by a premium adjustment percentage.
  • For all other coverage: The CY2014 maximum deductible will be multiplied by that premium adjustment percentage AND THEN doubled.
  • Rounding: If any of these increases are not a multiple of $50, they’ll be rounded to the next lowest multiple of $50.

The Premium Adjustment Percentage

This term, “Premium Adjustment Percentage,” defines how much premiums will be adjusted (you know that’s almost always going to be adjusted “up,” right?).[8] The way I read it, it’s basically a guesstimate by the Secretary of Health and Human Services.

• Starting in 2013: No later than Oct. 1 each year, the Secretary of Health and Human Services has to estimate the calendar year’s average per capita premium for health insurance coverage in the U.S.
• Starting in 2014: The Premium Adjustment Percentage will be how much the Secretary of Health and Human Services estimates the new year’s average per capita premium will exceed the previous year’s.

At least that’s what I think it means. Here’s what the law actually says:

Section 1302(c)(4): Premium Adjustment Percentage. For purposes of paragraphs (1)(B)(i) and (2)(B)(i), the premium adjustment percentage for any calendar year is the percentage (if any) by which the average per capita premium for health insurance coverage in the United States for the preceding calendar year (as estimated by the Secretary no later than October 1 of such preceding calendar year) exceeds such average per capita premium for 2013 (as determined by the Secretary).

Actuarial Value Protected

The “actuarial value” of any health plan can’t be affected by the limitations under this paragraph.[9] (I’m not sure what they mean by “under this paragraph.” Do they mean everything that comes next? Or everything in Section 1302(c)(2)? Oh Legalese, I am coming to hate your impenetrable nature.)

At least Healthcare.gov was kind enough to explain actuarial value to me:

“The percentage of total average costs for covered benefits that a plan will cover. For example, if a plan has an actuarial value of 70%, on average, you would be responsible for 30% of the costs of all covered benefits.”

Reference to Some Other Health Act

The deductibles we’ve been discussing do not apply[10] to the benefits in Section 2713 of the Public Health Service Act.

So what the heck is THAT act? I looked it up, and Jesus Christ, it dates back to 1944 and has had tons of amendments since. It’s captured in Title 42 of the U.S. Code (take a peek to see all the bazillions of things covered in Title 42). I’m going to ask a friend or two for some help in looking up Section 2713. More on this later!

Coming Up Next

My next article will tackle:

• Explaining that reference to Section 2713 of the Public Health Service Act
• Describing the various “levels of coverage”: Bronze, silver, gold, and platinum.

Footnotes! We’ve Got Footnotes!