Cap on out-of-pocket health costs is praised

Study: 300,000 state residents would gain from law’s provision

By Kathie Durbin, Columbian staff writer

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Caps on out-of-pocket medical costs required by the federal health reform bill would shield nearly 300,000 Washington residents from $541 million in catastrophic health care costs if those caps were in place today, says a new study conducted for a national health care consumer group.

The Patient Protection and Affordable Care Act, signed into law by President Barack Obama in March, would cap annual out-of-pocket health care costs at $5,950 for individuals and $11,900 for families if those caps were in place today, the study found. The caps are scheduled to take effect in 2014.

Families USA commissioned the study by The Lewin Group, a health care policy research and consulting firm, to underscore how limiting out-of-pocket costs would benefit even people who have health insurance.

“Two decades of rising health care costs have squeezed families into coverage with higher premiums, higher co-payments and higher deductibles,” said Ron Pollack, executive director of Families USA. “These families are terribly vulnerable to financial devastation caused by unexpected illness or injury.”

Families facing catastrophic health care costs “generally face only bad alternatives, including massive credit card debt, bankruptcy, even foreclosure,” he said.

Nationally, nearly 15 million people will face financial crises driven by uncovered health care costs this year, Pollack said. He predicted that caps on out-of-pocket costs would have “a profound, beneficial impact on the fortunes, finances and futures of families” in Washington and nationwide.

The study found that of the 299,900 Washington residents who will spend more than the out-of-pocket caps this year, 71 percent — about 213,200 people — are in families supported by at least one wage-earner, and more than half of those workers are employed by small businesses.

The average insurance premium for employer-provided family coverage more than doubled between 2000 and 2010, jumping from $6,438 to $13,770, Pollack said. Small businesses have borne the brunt of those increases, he said, paying on average 18 percent more than large businesses for comparable health insurance plans.

U.S. Rep. Jay Inslee, D-Wash., a member of the House Ways and Means Committee, said the new law protects everyone because everyone is vulnerable to unexpected health care costs resulting from car accidents, heart attacks and other health crises.

“There are lots and lots of Americans who buy insurance today who think they are covered, but then they suddenly get the big illness or accident and they find out how inadequate their insurance is,” Inslee said. “You are looking at a huge threat for most middle-class families.”

Inslee said the caps on out-of-pocket costs are “one of the things in the bill that I think a lot of people missed” in the recent House debate over repeal of the health reform bill. House Republicans focused on other portions of the bill, including the individual mandate requiring everyone to buy health insurance or pay a fine, in their push for repeal.

U.S. Rep. Jaime Herrera Beutler, R-Camas, who voted for repeal, said through her spokesman, Casey Bowman, “We don’t know about the study or the accuracy of the data.”

He added, “Here’s what we do know: Last year’s health care overhaul actually increases health care costs. The Congressional Budget Office says insurance premiums will increase by 10 to 13 percent because of the health care overhaul, and businesses will pay more in taxes.”

Bowman said Herrera Beutler has proposed solutions, such as allowing families and individuals to buy insurance across state lines, “that would decrease the core costs of health care for everyone, not just set artificial caps that families and small businesses will likely pay for through higher premiums. “

Inslee noted, however, that at least one prominent Republican, former U.S. Sen. Bill Frist, has gone on the record in favor of amending the bill, not repealing it. The Senate, still narrowly controlled by Democrats, has refused to take up the House repeal bill.

In a Jan. 18 press conference hosted by the Bipartisan Policy Center, Frist, a former Republican majority leader, said Republicans shouldn’t try to repeal the health reform law, but instead work to reform parts they disagree with.

“It is not the bill that [Republicans] would have written,” Frist said. “It is not the bill that I would have drafted. But it is the law of the land and it is the platform, the fundamental platform, upon which all future efforts to make that system better, for that patient, for that family, will be based … (The bill) has many strong elements. And those elements, whatever happens, need to be preserved.”

Kathie Durbin: 360-735-4523 or kathie.durbin@columbian.com.