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December 15, 2013

Navigating the range of out-of-pocket costs

CHICAGO — Are requirements of the nation’s new health care law driving up out-of-pocket costs for people buying their own insurance?

In some cases, yes. But the law also eliminated some of the largest deductibles, or the amount a consumer pays for actual medical care before an insurance company begins paying.

The Affordable Care Act’s cap on out-of-pocket costs  — $6,350 for an individual and $12,700 for a family — did away with some whopping deductibles in plans previously offered to people without employer-provided coverage. Deductibles as high as $10,000 for an individual and $30,000 for a family were features of policies sold on the individual market in Illinois 11 months ago, according to a report from the U.S. Government Accountability Office.

The GAO report makes it possible to compare specific scenarios before and after the health law’s protections and requirements go into full effect. It shows that similar priced plans may now have larger deductibles.

Two examples:

— Lowest-priced plan for a couple, aged 55:

Last year on the Illinois individual insurance market, the cheapest health insurance plan for a couple living in Chicago, both age 55, cost about $4,000 a year in premiums, but the plan’s annual deductible was a staggering $30,000, according to the GAO report.

Today, the lowest-cost plan for the same couple would cost more: about $6,400 in annual premiums, with tax credits lowering the price for some people, but with an annual deductible of $12,700, the highest allowable, according to, the federal government’s health care website.

— Medium-priced plan for a family of four:

Last year on the Illinois individual insurance market, a medium-priced health plan for a Chicago family of four, parents both age 40, cost about $9,000 a year in premiums. The family’s annual deductible under the plan was $3,500, according to the GAO report.

Today, a similar marketplace plan costing the same in premiums for the same family has a higher deductible of $10,000. But because of the health law, many preventive services like cancer screening, mammograms and immunizations would be free for the family. Some families would qualify for tax credits to lower the cost of premiums.

The deductibles for many low-cost marketplace plans are high compared to the average for people provided health benefits through their jobs. The average deductible for workers with job-based insurance is $1,135, according to the nonpartisan Kaiser Family Foundation’s 2013 annual survey of benefits.

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