Health Reform Talk: Deductibles in more than one-third of small group health plans exceeded ACA limits, study finds

Monday, January 20, 2014 - Wolters Kluwer Law & Business

Deductibles in more than one-third of small group health plans exceeded ACA limits, study finds

Ninety-six percent of Bronze plans in the Small Business Health Options (SHOP) Exchange had deductibles over the $2,000 cap set by the Patient Protection and Affordable Care Act (ACA; P.L. 111-148), according to a study byHealthPocket.

Plan types. The ACA created four basic health plan designs to replace existing health plans and address the needs of most plan shoppers who are not enrolled in a grandfathered health plan, Medicaid, or Medicare. These plans are designated the Bronze Plan, the Silver Plan, the Gold Plan, and the Platinum Plan. All plans share a mandatory set of insurance coverage features known as the essential health benefits. They differ from one another based on the percentage of medical expenses paid by the insurance plan, ranging from 60 percent of expenses to 90 percent of expenses.

Limits waiver. The ACA also capped deductibles for small group health insurance plans at $2,000 for individuals and $4,000 for families. However, the Department of Health & Human Services announcedin February 2013 that these deductible limits could be waived in situations where a limit prevented a health plan from meeting its ratio of insurance payments to enrollee out-of-pocket costs under the ACA.

“As the implementation of the Affordable Care Act gets progressively modified, we are finding a variety of downstream consequences for consumers," said Kev Coleman, Head of Research and Data at HealthPocket, "In the case of the small group market, the conditional waiver has allowed the deductible for Bronze plans to average over twice the amount of the original deductible limit."

Limits exceeded. Using government data on this year's small group health plans from 32 states, HealthPocket analyzed the average out-of-pocket costs for the major health plan types and then determined what percentage of plans, if any, exceeded the original deductible limit for the small group market. For individual enrollees in small group health plans, HealthPocket found that 35 percent of the plans studied had deductibles that exceeded the ACA limits. When analyzed by plan type, HealthPocket found:

96 percent of Bronze plans had deductibles over the $2,000 cap,
28 percent of Silver plans had deductibles over the $2,000 cap,
6 percent of Gold plans had deductibles over the $2,000 cap, and
0 percent of Platinum plans had deductibles over the $2,000 cap.

When examining deductibles for families, similar results were found with respect to the percentage of plans that exceeded the $4,000 family deductible cap.

Strictly enforcing the deductible caps for small group health plans could have substantially narrowed the inventory of health plans in the SHOP Exchange, according to the study. For the Bronze tier in particular, fewer than 4 percent of 2014 plans would have satisfied the ACA’s deductible caps for individual as well as family enrollees.