By Dez Duran-Lamanilao
Section 1302(c)(1) of the Public Health Service (PHS) Act section 2707(b), as added by the Affordable Care Act (ACA), sets out a limit for out-of-pocket costs for both self-only and other than self-only coverage. Thus, effective January 1, 2015, non-grandfathered group health plans as well as group health insurance coverage are required to have an out-of-pocket maximum, limiting overall out-of-pocket costs on all essential health benefits (EHB).
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What does this mean for out-of-pocket costs or in the case of employees with health insurance plans provided by their employers (cost-sharing reductions)? Since out-of-pocket costs are medical care expenses that are not reimbursed by insurance, having a limit increases affordable coverage access and thus, bigger savings. Examples of out-of-pocket expenses include coinsurance, deductibles and copayments. You can use this tool to find out if your income estimate is within the range for cost-sharing reductions. Lower income within the range means more savings.
There is a possibility that higher out-of-pocket costs would mean less use of care. A study that appeared in a 2016 issue of “The JAMA Network” reveals that out-of-pocket spending for major health care costs may cause huge financial distress on the part of the patients. There is limited data though on out-of-pocket spending among nonelderly adults.
How can you save on expenses such as these while receiving quality care?
- Understand the details of the treatment that you need so you can find what the best option for you is.
- Negotiate costs and payment methods upfront. This is to avoid surprise charges.
- Using a health care credit card to pay for the expenses. You can pay in monthly installments for a longer period of time and sometimes without interest charges.
- Ask your doctor about health care loans. Sometimes these are offered as a service to patients.
- Finally, ask an insurance agent about it. Information may not be readily available but since you are paying for these, it will help a lot to find answers to your questions.