I spent some time yesterday updating my post on the newly reported delay of the cap on out-of-pocket maximums in the Affordable Care Act. A few more pieces have come out that I didn’t include there, including from the Center on Budget and Policy Priorities and Kaiser Health News. While they’re perfectly fine if you’d like to dig a little deeper into the details, the best and most succinct explanation comes from Jonathan Cohn of the New Republic:
Everybody needs to breathe—and to put the story in its proper, rather different context.
The ruling is indeed frustrating and, for a change, it will actually make a difference to people who need insurance. Obamacare is supposed to place a hard limit on your out-of-pocket medical spending. If you have coverage through an employer—that is, a “group” plan—the limit is supposed to be $6,350 for an individual and twice that for a family. But the employers who provide group coverage frequently do so by breaking out spending into different categories—and, sometimes, hiring outside companies to manage the different parts. An employee in such a company would, technically speaking, have several different insurance plans—one each for medical, prescriptions, dental, and so on.
Employers told the administration that coordinating records from the different plans was difficult, so the administration gave them some leeway. Employers who already have such arrangements—and only employers who already have such arrangements—can have one extra year to put new accounting systems in place. During that time, the $6,350 limit will apply to “major medical”—doctor visits, hospitalizations, and so on—but not prescriptions, dental, or vision.
Really, that first sentence is probably best advice I’ve read about reacting to ACA developments — now and for the next year and a half.
But to the point of this delay, as was somewhat unclear yesterday morning, it only applies to group plans that currently use multiple service providers. It also only applies to insurance plans separate from those that cover significant medical visits. As Cohn goes on to write in that piece, this doesn’t make the delay insignificant overall. This will obviously affect a subset of people who are struggling to afford prescription drugs, for instance, but they’ll also benefit from other portions of the law.
Breath. Context. Move forward. Nobody said (or at least, no one should have said) this was going to be easy.