Fred Pace’s otherwise excellent report on health care spending (“Health care costs rising faster than wages,” Dec. 29, 2019) leaves out one factor that as a longtime health insurance broker I see as hugely significant. The Affordable Care Act is forcing insurance companies to give much more complete catastrophic coverage due to caps on yearly maximum out-of-pocket limits and the removal of caps on lifetime benefits
While everyday spending is going up for most of us, fewer of us are in danger of going bankrupt because of limits on medical expenses.
For example, the 2020 ACA-mandated MOOP limit is $8,150 for individuals or $16,300 for families. These seem to be large amounts until you take into account that a hospital stay will easily result in a five-digit bill. Someone having a major procedure like a hip replacement would be well advised to schedule it early in the year, which will essentially make all remaining medical bills free of out-of-pocket charges until December.
When advising clients as to which health plan would be best to choose, my first reply is always “look at the MOOP!” When one takes into account the total of this amount and premiums paid, health care expenses can more easily be seen as less scary, all because of the ACA.
Yes, it’s important to limit everyday spending as much as possible, but insurance is not meant to cover every expense, just the ones that could make you go broke!