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CPBJ Extra Blog

The waiver that changed the SHOP world

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I just got an email that rattled my deductible world.

It started like this:

"The Affordable Care Act 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 announced in 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 Affordable Care Act."

I'd forgotten about that cap.

So, did the waiver make a difference? HealthPocket analyzed government data for 2014 Small Business Health Options marketplace containing qualified health plans sold on exchanges in 32 states and said yes.

For individual enrollees in SHOP marketplace plans, which would have had deductibles capped at $2,000 but for the waiver, HealthPocket found the following had deductibles exceeding $2,000:

• 96.43 percent of bronze plans

• 28.10 percent of silver plans

• 6.48 percent of gold plans

• No platinum plans

For family enrollees in SHOP marketplace plans, which would have been capped at $4,000 deductibles, HealthPocket found the following over:

• 96.43 percent of bronze plans

• 27.88 percent of silver plans

• 6.48 percent of gold plans

• No platinum plans

Average medical deductibles for individual and family plans were as follows, respectively: Bronze, $4,216 and $8,667; Silver, $2,384 and $4,946; Gold, $1,278 and $2,872; and Platinum, $323 and $647.

"Strictly enforcing the deductible caps for small group health plans could have substantially narrowed the inventory of health plans in the Small Business Health Options marketplace. For the Bronze tier in particular, fewer than 4% of 2014 plans would have satisfied the Affordable Care Act deductible caps for individual as well as family enrollees," the analysis said.

It continued, "The ability to waive the deductible cap based on actuarial value necessity calls into question the ongoing value of the deductible cap," then posted a comparison showing little difference between deductibles in the small group market and those in the individual market, where no cap exists.

If the administration disallows deductible cap waivers in future regulations, HealthPocket concluded, almost all qualified bronze plans would have to decrease their deductibles to satisfy the limits. Decreased deductibles could, in turn, require increases in other categories of enrollee cost-sharing, such as copayments, for the plans to maintain their actuarial values.

"Several legislators in the House of Representatives have already started action to remove the deductible caps for employer-sponsored health plans," it said. "In August Representative Tom Reed [R-NY-23] introduced H.R. 2995, the Unnecessary Cap Act of 2013, which would eliminate the deductible caps for plans in the SHOP marketplace. The bill is currently referred for discussion to the House Committee on Energy and Commerce and has five House cosponsors."

What do you think — would you like to see the cap waived permanently?

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Larry Robbins has been named one of the 50 most powerful people in health care today. Here's why you might want to pay attention to him.

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This is pretty much instant required reading: Former HHS Head Offers His Take On Health Law's Problems.

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Don't forget to show up (digitally) for our live chat with veteran Obamacare expert Rob Glus. It's tomorrow — Friday, Jan. 10 — from 9 to 10 a.m. The more questions we get on where things now stand for businesses with Obamacare — and consequently what they should be doing — the better. And did I mention that these are always both free and entertaining?

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