Allowing states to waive key ACA benefits would significantly increase out-of-pocket expenses
Costs for individuals needing inpatient care would rise more than $33,000 annually, according to an analysis.
Patients would face thousands of dollars in new out-of-pocket expenses if states were allowed to waive an Affordable Care Act provision that requires insurance companies to cover 10 essential health benefits. This was one of the key findings of a recent analysis by the Urban Institute funded by the Robert Woods Johnson Foundation.
The requirement that these benefits be included in ACA-compliant nongroup insurance coverage increases premiums beyond what they would be if people could purchase plans covering fewer benefits. This had made the requirements somewhat controversial and spurred interest in reducing or eliminating them among some insurers and policymakers. Some have proposed allowing states to use waivers to reduce or eliminate essential health benefit requirements.
Related: 7 facts about the new ACA waiver program, for agents
“The idea behind essential health benefits is to standardize coverage so that plans cover the same health services,” said Katherine Hempstead, senior policy adviser for the foundation. “When necessary medical care is not covered by insurance, it means that people either live with sickness or risk bankruptcy to pay medical bills. To keep care affordable for everyone, essential health benefits must be covered by insurance plans.”
According to the analysis:
- Costs for individuals needing inpatient care would rise more than $33,000 annually if they were spread only among the pool of people needing inpatient services, for example, instead of those costs being shared among the broader pool of people covered under the ACA’s marketplace nongroup plans.
- Women using maternity care through their ACA marketplace health plan could expect close to a $17,000 increase in overall costs, on average.
- Individuals needing specialty drugs for treating diseases such as cancer could see premiums rise by more than $14,000 annually if essential health benefits coverage for these drugs is eliminated.
“Policymakers seeking to eliminate the ACA’s essential health benefits argue that paying for coverage for services that some people may not use unnecessarily raises costs for many,” the analysis concluded. “Though annual premiums may fall if essential health benefits coverage is eliminated, people who need these services could face thousands more in direct out-of-pocket costs as a result, likely leading to significantly higher levels of unmet medical need.”
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