Few Medicare enrollees pay huge prescription drug costs out of pocket

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The scaled-back prescription drug cost control measures belatedly added to the Build Back Better bill include a $2,000 annual cap on out-of-pocket costs for enrollees in Medicare Part D.

That's a vital reform, since Medicare enrollees' exposure to drug costs is currently open-ended, and can run to many thousands for the most expensive drugs, e.g., for cancer or rare diseases. 

But the complex Part D payment formula can leave some observers with the impression that more enrollees are paying astronomical costs than is the case. Specifically, references to amounts paid by all payers in each of the first three coverage phases often give the impression that those total costs are paid by enrollees. Such confusion appears to have recently reached the White House:

Help me tell ACA stories

Greetings, dear readers: I would like to tell stories about people's experiences with lesser-known ACA benefits -- or shortcomings. Writeups may appear elsewhere -- healthinsurance.org or other publications -- or here.  These are the categories I have in mind:

1) Donut hole: I'd like to speak to Medicare enrollees who have benefitted (or not so much) from the ACA's gradual closing of the "donut hole" in prescription drug coverage.

2) Lifetime coverage caps: pre ACA, in 2009, 59% of people insured through employers were subject to lifetime caps on coverage -- typically $2 million by 2009, but often $1 million. The ACA banned lifetime and annual caps.  In a recent post, I  dug up a 2007 study finding that 20,000-25,000 people would hit lifetime caps by 2009.and forecasting that 300,000 would max out by 2019 if the caps were not raised. I'd like to speak to anyone who ever hit the caps, or was saved from the caps by the ACA, or is worried about hitting the caps (because of an expensive chronic condition) post-ACA.

In Covered California, deductibles get steeper and narrower

As deductibles have risen steadily in health plans sold in the ACA marketplace, plans are offering more services that are not subject to the deductible. HHS has embraced this trend and incorporated it in the standardized benefit designs launching in the 2017 (which are optional for insurers).

California, which has had mandatory standard plan designs since the launch of the marketplace in 2014, has always included benefits not subject to the deductible in those designs -- and they have expanded outside-the-deductible services periodically, as deductibles and copays have also risen steadily.

In 2014, bronze plans offered on Covered California had a $5,000 deductible, with no separate deductible for drugs. Three primary care doctor visits were not subject to the deductible, as were three urgent care, outpatient mental health or substance abuse visits. In 2016, when the medical deductible was raised to $6,000, a $500 pharmacy deductible was added, and laboratory tests were put outside the deductible.

Ambetter's donut hole coverage: high deductibles alloy ACA silver

In pre-ACA times, many low income workers were enrolled in "mini-med" health plans that provided first-dollar coverage up to very low limits, and no insurance after those limits were reached. Such plans still exist, though they don't satisfy the ACA's "personal responsibility" requirement.

Also long available: "catastrophic" insurance that provides no coverage at all (or, post-ACA, preventive care only) until a high deductible is met. That's basically a stop-loss policy for people with enough assets not to be deeply indebted by by the time they reach the deductible. Many if not most bronze plans offered in the ACA marketplace are in this category: deductibles are usually north of $6,000 per person.

Yesterday, CMS touted an under-recognized fact: lots of marketplace plans offer some benefits before the deductible is met. Put this in the category of consolation prize: