Analysts at Avalere Health have quantified something brokers have been saying for months: the exchange plan out-of-pocket maximums are high.
The Patient Protection and Affordable Care Act is supposed to cap exposure to deductibles, co-payments and coinsurance payments for all insureds, and to provide subsidies to help further reduce exposure for insureds with incomes of 100 percent to 250 percent of the federal poverty level.
PPACA supporters in the Obama administration elsewhere note PPACA is the first national law that puts limits of any kind on out-of-pocket costs.
But Avalere analysts say the limits are still high enough to leave even consumers with incomes at 500 percent of poverty level underinsured.
The Commonwealth Fund, a health policy research group, classifies consumers with income over 200 percent of poverty level as underinsured when out-of-pocket costs exceed 10 percent of their income.
In 2014, the out-of-pocket maximum for consumers with incomes over 250 percent of poverty limit will be $6,350 for an individual and $12,700 for a family.
To make individual consumers fully insured, the annual maximum would have to be about $3,000 for a consumer with income near the 250 percent-of-poverty-level cut-off, and about $4,500 for a consumer at 400 percent of poverty level, according to the Avalere analysis.
Even for a “high-income” individual with income around 500 percent of poverty level, being fully insured would mean having an annual out-of-pocket maximum of about $5,800 – well below the actual $6,350 limit.
Many individual policies written before 2013 also have high out-of-pocket maximums, but Dan Mendelson, Avalere's chief executive officer, said consumers in group health plans are used to much lower ones.
Mendelson said the out-of-pocket costs could cause big problems for people with diabetes and other serious chronic conditions.
“In the longer term,” he said, “this design raises important questions about what we want insurance to be.”