Health Plans With High Coinsurance Double Dipping With Big Out-of-Pocket Costs
Higher coinsurance rates correspond to higher annual limits on medical out-of-pocket costs
Consumers could still fare better now than under some Affordable Care Act plans
SUNNYVALE, Calif., March 25, 2013 /PRNewswire-USNewswire/ — A new analysis of coinsurance rates from HealthPocket, Inc., shows that the average coinsurance rate nationally for individual and family health plans is 20 percent, meaning that people with coinsurance are paying one-fifth of the costs on average for certain more expensive services such as hospitalization, child birth, emergency care, and others.
The analysis also shows that the plans with the highest average coinsurance rate (above 40 percent) also had the highest average annual limit on out-of-pocket expenses for their enrollees. The coinsurance rate did not, however, track predictably with the average deductibles that consumers pay.
“Coinsurance” is a common term in the individual and family market as a method of cost-sharing for more expensive services, including hospitalization, surgery, child birth, and emergency care. Out of the 9,711 plans examined, a quarter of plans with coinsurance rates were higher than the national average. The lowest range of up to a 10 percent coinsurance rate corresponded to an average out-of-pocket limit of $4,286 while the highest range of above 40 percent corresponded to an average limit of $8,825.
The Affordable Care Act (ACA) will prevent companies from offering plans with some of the current outer limits of these costs, but in some instances, consumers may face even higher deductibles and out-of-pocket costs than the current average plan.
“This is definitely a situation of buyer beware, particularly if people assume that a plan with a low premium but high coinsurance translates into less money out of their pockets in a given year. A serious medical episode could completely change the financial impact of the health plan,” said Kev Coleman, head of Research & Data at HealthPocket and the lead author of the analysis. “Starting in 2014, cost transparency will be even more critical given that health plans will be designed around what percentage of medical costs the consumer is expected to pay. Consumers will need not only to understand how much of their costs are covered by their health plan but what their healthcare providers charge for the services they use.”
Using figures from a study done by the Kaiser Family Foundation, the analysis compared these current average costs for individual and family plans with some potential designs for the upcoming Bronze and Silver plans offered under the ACA. A Bronze Plan using the same coinsurance rate as the current national average was found to have both a higher deductible and out-of-pocket limit than the today’s average plan. A Silver Plan using the same coinsurance rate as the national average had a higher out-of-pocket limit but significantly lower deductible.
All plans under the ACA will include their deductibles as part of the out-of-pocket limits, making it easier for consumers to better estimate their costs, and more services will be covered under these plans than the current comparison plans.
To review the full findings of HealthPocket’s research, visit “Today’s High Coinsurance Health Plans: Poor Protection Against Medical Expenses.” To review the out-of-pocket limit for any plan, visit HealthPocket’s individual and family health insurance comparison tool.
HealthPocket.com is a free website that compares and ranks all health plans available to an individual, family, or small business, so everyone can make their best health plan decision and save on their out of pocket costs. The Company uses only objective data from government, non-profit, and private sources that carry no conditions that might restrict the site from serving as an unbiased resource. The founders of HealthPocket.com spent decades pioneering online access to health insurance information and knew they could offer something different that can positively change how people buy and use healthcare in the U.S. Learn more at www.HealthPocket.com.