Smart Benefits: New Law Eliminates Limits on Deductibles
Amy Gallagher, GoLocalProv Business/Health Expert
Smart Benefits: New Law Eliminates Limits on Deductibles
On April 1, 2014, the Protecting Access to Medicare Act of 2014 (the Act) was enacted. Section 213 of the Act contains a provision that eliminates the limitation on deductibles for employer-sponsored health plans, which was part of the Affordable Care Act (ACA).
Limits Drove Costs
GET THE LATEST BREAKING NEWS HERE -- SIGN UP FOR GOLOCAL FREE DAILY EBLASTEarlier this year, non-grandfathered, small employers were forced to change their plan design deductibles effective for January 1 coverage if their deductibles were $2,000 (self-only) or $4,000 (other than self-only), or higher. As a result, many employers had to terminate plans previously in effect and adopt new ones – often with higher premium costs for employers and employees, who previously had higher deductibles in exchange for lower premiums.
The limit on deductibles was also problematic for those small employers who offered higher deductible plans in tandem with health reimbursement arrangements (HRAs) to legally reimburse partial deductible expenses for employees.
Change Means More Flexibility
Now, because the deductible limits have been repealed, employers will once again have more flexibility with the plan designs they offer. That means they can eliminate deductibles, or set deductible limits at any level below the plan’s out-of-pocket maximum (OOPM), as long as they are allowed under state laws and regulations.
Other Limits Remain
However, some limits on plans sold after January 1, 2014, will remain:
· The annual limits on a plan’s out-of-pocket maximum ($6,350 for self-only coverage and $12,700 for other than self-only coverage) are still in effect
· The requirement that all in-network cost sharing (including deductibles and flat dollar copayments) must accumulate to the plan’s OOPM remains in effect.
Preventable Deaths in American Hospitals
To Err is Human
In 1999 the Institute of Medicine published the bombshell “To Err Is Human” report, which revealed that up to 98,000 people a year die because of mistakes in hospitals. Though initially disputed, the report is now widely accepted by doctors and hospital officials, including RI Dept. of Health Director Dr. Michael Fine.
Health and Human Services
In 2010, the Office of Inspector General for Health and Human Services said that bad hospital care contributed to the deaths of 180,000 patients in Medicare alone in a given year.
Journal of Patient Safety
In 2013, the Journal of Patient Safety published research that claims the number of preventable deaths may be much higher — between 210,000 and 440,000 patients each year who go to the hospital for care suffer some type of preventable harm that contributes to their death. That's roughly one-sixth of all deaths in the United States each year.
John. T. James, Ph.D
Based on that 2013 Journal of Patient Safety report by John T. James, Ph.D, medical errors are the third-leading cause of death in America, behind heart disease, which is the first, and cancer, which is second.
Over Treatment
Many preventable deaths are the result of "over treatment," according to Dr. Michael Fine, Director of the Rhode Island Department of Health, who said 30 to 50 percent of all medical procedures are unnecessary.
Unnecessary Admissions
According to Dr. Michael Fine, Director of the Rhode Island Department of Health, at least 11 percent of ALL hospital admissions are unnecessary.
Healthcare Improvement
The Institute for Healthcare Improvement estimates there are 15 million incidents of medical harm each year.
Checklist Protocol
Dr. Peter Pronovost, Johns Hopkins Medicine’s senior vice president for patient safety and quality, has developed a scientifically proven method for reducing the deadly infections associated with central line catheters. His simple but effective checklist protocol virtually eliminated these infections across the state of Michigan, saving 1,500 lives and $100 million annually.
