Ways In Which Obamacare Saves Consumers Money Which You Might Not Have Been Aware Of

In our highly polarized country there are two general reactions to the Affordable Care Act, repeating the same lies no matter how often debunked and engaging in ridiculous attempts at blocking the law on the right, versus those in the reality-based side of the political spectrum who have been documenting the many benefits of the law. Many of the major benefits, including increasing the number of people insured, making coverage more affordable, reducing health costs,  and eliminating the ability of insurance companies to deny coverage to those who have medical problems, have been widely discussed. There are a few other benefits which many might be less aware of which help reduce costs.

Regulations to reduce medical errors has both saved lives and reduced costs. McClatchy reports:

Improved patient safety and fewer mistakes at U.S. hospitals saved the lives of roughly 50,000 people from 2011 to 2013, the Obama administration reported Tuesday.

Incidents of hospital-induced harm – such as adverse drug events, infections, falls and bedsores – fell by 17 percent, or an estimated 1.3 million episodes, from 2010.

The improvements, driven by a number of public and private initiatives, saved an estimated $12 billion in health care spending, according to a new government report that found dramatic progress in the fight to curb preventable medical injuries at U.S. hospitals.

The law has saved money for consumers both from lower than anticipated premiums as well as other means which are lowering out of pocket costs. In the past many insurance plans would have a maximum coverage limit in order to protect the insurance company rather than the consumer from catastrophic expenses. The Affordable Care Act not only eliminated maximums in coverage but also places new maximums on total out of pocket costs. While people typically compare insurance policies based upon premium first and then maybe the deductible, this is a factor which many ignore. Besides having this benefit, Kaiser Health News  has reported that many plans, including seventy-four percent of silver plans, have even lower out of pocket maximums than is allowed under the law.

Consumers shopping on the health insurance marketplaces will find many plans with out-of-pocket spending limits that are lower than the maximums allowed under the health law, according to an analysis by Avalere Health.

Seventy-four percent of 2015 silver level plans’ out-of-pocket spending caps are below the $6,600 spending limit allowed for individual plans and $13,200 maximum for family plans, according to Avalere, a consulting firm. The average out-of-pocket maximum for 2015 individual silver plans will be $5,853, says Caroline Pearson, a vice president at Avalere. Silver was the most popular plan type this year, selected by about two-thirds of enrollees.

After a policyholder reaches the out-of-pocket spending limit during the year, the insurer pays all the bills, unless, for example, they involve doctors and hospitals not in the health plan’s network.

The vast majority of other plans also feature lower limits on out-of-pocket spending—which includes deductibles, copayments and co-insurance, but not premiums. Seventy-one percent of bronze plan spending limits were below the allowed maximum (with an average spending limit for single coverage of $6,381), as were 94 percent of gold plans (average limit, $4,458) and 98 percent of platinum plans (average limit, $2,145).

In addition, many plans are paying for more coverage than is required before the deductible is met. The Affordable Care Act requires that many preventative services be offered with no copay or deductible. Some plans are now offering benefits such as office calls and prescription drug coverage prior to meeting the deductible. By comparison, when I last shopped around for insurance on the individual market prior to the star of the Affordable Care Act, I could not find any plans being offered which covered either office calls or medications.

Consumers are also benefiting from the new requirements on medical loss ratios which require that eighty percent of premiums collected go to paying out claims. This means that many consumers are receiving partial refunds on their premiums, along with this helping to lower premiums:

A new report from federal health officials, which concludes that health spending had grown at a historically slow rate in 2013, says the so-called MLR provision is helping drive the broader easing of spending growth in the industry.

The medical-loss-ratio requirement mandates that insurance companies spend at least 80 percent of premiums on actual health benefits. It is one of the various provisions intended to help shape the behavior of insurance companies, making the market more efficient and cost-effective for consumers. Administrative costs are kept down, meaning that more of people’s money is going to real care.

“The medical loss ratio requirement and rate review mandated by the ACA put downward pressure on premium growth,” officials from the federal Centers for Medicare and Medicaid Services wrote in their report. Overall private insurance spending, of which premiums are a part, grew at a 2.8-percent rate — the lowest since at least 2007.

As Larry Levitt, vice president at the non-partisan Kaiser Family Foundation, put it to TPM in an email: “That is how it’s intended to work.”

If insurers don’t meet the MLR requirement, then insurers must pay a rebate to their customers. But the intention was that it would drive premiums down, to the level needed to cover actual care. The rebates were just a means of enforcing it, and the companies seem to be responding.

Despite conservative misinformation which dissuades some from purchasing health insurance, Bloomberg News predicts that enrollments in insurance plans through the exchanges will exceed expectations this year. HHS is trying new ways to get out information on purchasing health insurance, including messages on the bottom of 7-Eleven receipts. Increased participation in the health plans will help increase the risk pool and further reduce costs for consumers in the future.

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