Impact of Out-of-Pocket Spending Caps on Financial Burden of those with Group Health Insurance

ABSTRACT BACKGROUND The Affordable Care Act (ACA) mandates that all private health insurance include out-of-pocket spending caps. Insurance purchased through the ACA’s Health Insurance Marketplace may qualify for income-based caps, whereas group insurance will not have income-based caps. Little is known about how out-of-pocket caps impact individuals’ health care financial burden. OBJECTIVE We aimed to estimate what proportion of non-elderly individuals with group insurance will benefit from out-of-pocket caps, and the effect that various cap levels would have on their financial burden. DESIGN We applied the expected uniform spending caps, hypothetical reduced uniform spending caps (reduced by one-third), and hypothetical income-based spending caps (similar to the caps on Health Insurance Marketplace plans) to nationally representative data from the Medical Expenditure Panel Survey (MEPS). PARTICIPANTS Participants were non-elderly individuals (aged < 65 years) with private group health insurance in the 2011 and 2012 MEPS surveys (n =26,666). MAIN MEASURES (1) The percentage of individuals with reduced family out-of-pocket spending as a result of the various caps; and (2) the percentage of individuals experiencing health care services financial burden (family out-of-pocket spending on health care, not including premiums, greater than 10 % of total family income) under each scenario. KEY RESULTS With the uniform caps, 1.2 % of individuals had lower out-of-pocket spending, compared with 3.8 % with reduced uniform caps and 2.1 % with income-based caps. Uniform caps led to a small reduction in percentage of individuals experiencing financial burden (from 3.3 % to 3.1 %), with a modestly larger reduction as a result of reduced uniform caps (2.9 %) and income-based caps (2.8 %). CONCLUSIONS Mandated uniform out-of-pocket caps for those with group insurance will benefit very few individuals, and will not result in substantial reductions in financial burden.