Kaiser Analysis Estimates Cost-Sharing for Bronze Plans Under Health Reform

Kaiser Foundation reports:

“The least expensive health plan that most Americans would be required to purchase in 2014 under the so-called ³individual mandate² would provide coverage largely for catastrophic medical expenses, finds a new Kaiser Family Foundation study. The study is available at: http://www.kff.org/healthreform/8303.cfm.

Under the Affordable Care Act (ACA), four tiers of health insurance will be offered in the health insurance exchanges and throughout the individual and small group markets beginning in 2014. Under the minimum coverage plan, the ³Bronze² plan, the insurance plan will pay for 60 percent of health care costs on average while the individual enrolled will pay the remaining 40 percent in deductibles, copays and coinsurance. Individuals will have the option to purchase plans with more comprehensive coverage at higher premiums.

The study projects what deductibles and coinsurance would meet the requirements of a Bronze plan, presenting two alternatives: One with a deductible per individual of $4,375, with consumers paying 20 percent of their health care expenses once meeting the deductible. The other with a deductible of $3,475 and patient coinsurance of 40 percent. Under both plans, total patient out-of-pocket costs would be capped at $6,350, as required by the health reform law. Deductibles for families would be double these amounts.

Deductibles for the Silver plans, the next level up, in which the insurance plan pays for 70 percent of health care costs (and the individual pays a higher premium), are expected to be more modest, ranging from $650 with 40 percent coinsurance to $2,050 with 20 percent coinsurance.  Silver plans are likely to be the most popular plans, as they serve as the benchmark for subsidies from the federal government to low- and middle-income people buying insurance on their own.

Under the ACA, preventive services, such as annual physicals and colorectal screenings, are covered without copays or deductibles, so these services would not factor into deductibles or out-of-pocket costs.

For this analysis, the Foundation commissioned Aon Hewitt, a benefits consulting firm, to estimate the illustrative cost-sharing structures for bronze and silver level plans when the ACA is implemented in 2014, based on guidance issued to-date by the federal government.

Also from the Foundation, in his latest column, Kaiser President Drew Altman explores the recent falloff in health care utilization and how high-deductible coverage could be playing a role. The column is available

at: http://www.kff.org/pullingittogether/altman_falloff_utilization.cfm.