Insurance caps should help Coloradans, study finds |

Insurance caps should help Coloradans, study finds

A recent study found the proposed health care spending caps on out-of-pocket expenses will benefit Colorado’s small businesses and middle-class families. The report was put together by Families USA, a national, nonprofit and nonpartisan organization for health care consumers whose mission is to secure high-quality, affordable health coverage and care for all Americans.

Although the spending cap provision – part of the Affordable Care Act that would put a definite limit on the amount an individual or family has to pay out of pocket for health care – is set to go into effect in 2014, the nonprofit commissioned a study to look at the impact of the caps on Colorado families if they were going into effect in 2011. The study – performed by a health care policy research and management consulting firm – concludes spending caps will protect families from going into massive debt as a result of medical expenses.

“Two decades of rising health care costs have squeezed families into coverage with higher premiums, higher co-payments, and higher deductibles, and sometimes these costs have forced families out of health coverage altogether,” said Ron Pollack, executive director of Families USA. “These families are terribly vulnerable to financial devastation caused by unexpected illness or injury, and they generally face only bad alternatives, including massive credit card debt, bankruptcy, even foreclosure.”

The study estimates that in 2011, 235,800 Coloradans under the age of 65 are in families that will spend more than the out-of-pocket caps for services that will be covered in the Affordable Care Act’s essential benefits package. The act’s spending caps (adjusted for 2011) would be $5,950 for individuals and $11,900 for families. The study said out-of-pocket health care spending by these Colorado families will exceed the caps by more than $391.2 million in one year alone.

The report also said employees of small businesses – fewer than 100 employees – face the threat of high spending without the caps, since many small enterprises are charged about 18 percent more than larger businesses for similar health insurance plans. It estimates 106,900 Coloradans in families where the head of the household is employed by a small business will spend more than the out-of-pocket caps, and that almost half of residents who will spend more than the caps are in families where the head of the household works for a small business.

Pollack said the average premium for job-based family coverage grew from $6,438 to $13,770 from 2000 through 2010, an increase of 114 percent.

The health care plan provision also includes a sliding scale that would ensure those with lower and middle incomes will pay less than those with higher incomes.

Dr. Don Parsons of Dillon, a health policy and public health expert and retired general surgeon and Kaiser Permanente executive, said there are a lot of “ifs” that go along with the proposed provision.

He said if the Affordable Care Act isn’t shot down by the Supreme Court, the exchange in Colorado succeeds and people are able to – and choose to – buy insurance at rates they can afford, then the provision is a terrific idea … as long as people have the money to pay the caps.

“There are already people who have purchased such policies, so-called catastrophic insurance policies, who are not already able to afford the deductible,” he said. “The premiums they can afford, but the deductible, who gets stuck with the bill? It’s the providers.”

He said providers stuck paying for unpaid deductibles will just pass the costs onto other patients by driving up prices.

Parsons also said insurance companies could influence the effectiveness of the provision, even if it passes.

“Even if everything survives and succeeds, will the insurance companies find a way to manipulate the private insurance market so as to undermine some of the provisions of the Patient Provision and Affordable Care Act?” Parsons asked.

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