More on Out of Pocket Costs

As Sawait reported yesterday, key ACA consumer protections against out-of-pocket costs, SB639(Hernandez), passed the Assembly Health Committee. As per the promise of the Affordable Care Act, the bill ensures that California consumers don’t go bankrupt by medical bills by setting a maximum limit for out-of-pocket costs, and putting in place other cost-sharing consumer protections.

What’s especially notable is that if signed, the bill would provide these protections for consumers in individual and small group coverage in 2014, despite the Obama Administration’s decision to provide a one-year delay for specific plans–cited in yesterday’s New York Times article, that generated this News 10 piece:

Let’s be clear: No one should go bankrupt getting the care they need, especially if they have been paying premiums for protection against financial devastation. A core part of Obamacare and this bill is to remove fear of the fine print that consumers have when buying coverage, that the plan won’t adequately protect their financial future. These consumer protections are crucial for the MS patient with high prescription drug costs or any of us who end up in the hospitals for an extended time, that we are not on the hook for tens of thousands of dollars.

The New York Times was reporting on a one-year delay for very specific circumstances announced back in February, and in doing so significantly overstated the scope of the change.
* The delay is for group plans, but not the individual market, including those in Covered California (where the benefits and cost sharing had already been negotiated).
* The delay is only for when an employer (typically self-insured large employers) contract with multiple plan providers (such as having a separate plan for prescription drugs), and thus there is no one plan that can figure out what a patient has paid in out-of-pocket costs over the year. Presumably there is a way for this information to be shared among plans, but that’s the reason for the delay to figure this out.

* No one is getting worse than what is offered now, and many already have these limits in place–Table 7 of this report indicates that 80% of employers in California, both large and small, already have limits lower than the limit. (
* But even if it only impacts a few people in that one transition year, it’s a big deal for them. It could be the difference for not losing a house, or going bankrupt.

And that’s why SB639(Hernandez) is so important. This is the last important piece of legislation to ensure that all the consumer protections and benefits from the federal Affordable Care Act is in state law, so state regulators can enforce it. With this bill, California can once again not just implement the federal law, but improve upon it, so our patients get these benefits as soon as possible. This bill ensures that no California consumer in individual or small group coverage has to wait to get these important consumer protections. Beyond ensuring Covered California offers these key protections, this bill also extends some cost-sharing protections to the insurance market as a whole, so more patients benefit.

The bill now goes to Assembly Appropriations Committee.

Health Access California promotes quality, affordable health care for all Californians.