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Study: Standard Plans May Fund More Care Without Higher Premiums

By Erin Mershon, CQ Roll Call

June 15, 2016 -- Health plans that follow new federal standards next year may pay for more care without increasing consumers' out-of-pocket costs, according to a Wednesday report sponsored by the Families USA consumer advocacy group.

Federal standard plans likely to be offered on the health exchanges will cover more outpatient care before deductible costs are applied without significantly higher premiums than silver-level plans in Virginia, Pennsylvania, and North Carolina, the analysis by the actuarial firm Milliman found. The Centers for Medicare and Medicaid Services this spring outlined expectations for the plans.

The study offers a potential partial answer to a major challenge for supporters of the 2010 health law: improving affordability. While the law has improved access to coverage for millions of Americans, majorities of enrollees say they struggle to pay rising premiums or cover the cost of care before their high deductibles are met.

"These new plans ... will help make health care more affordable by helping to cover the costs of basic outpatient care before people pay off their deductible, instead of saddling patients with the entire cost before they reach their deductible," Sen. Sherrod Brown, D-Ohio, said on a call with reporters. "We have much to do to bring down costs, which is why we need to support innovative improvements like this one."

The federal standard plans, finalized in a March regulation, will cover certain services like primary care office visits, prescription drugs, and mental health visits before consumers have to meet the deductible, with only a small co-pay required. Most silver plans currently on the exchanges, including the three comparison plans in this report, do not cover any such services before consumers must pay the deductible.

Average premiums for the new federal standardized plans in the silver metal level would be within a range of 5 percent above or below the average premiums of the 2016 silver plans in the three states Milliman examined. The plan's deductible of $3,500 was less than two of the three comparison plans, the analysis showed.

"The Pennsylvania plan that we used for comparison does not help cover the cost of any doctor visits or medications until a consumer pays a $2,100 deductible. In contrast, the federal standardized silver plans help pay for primary and specialty care and all prescription drugs before the deductible—and at a somewhat lower premium," the report outlines.

Insurers aren't required to offer standardized plans. It's unclear how many will do so or what the actual premiums will be. Based on its findings, Families USA said it wants the government to require insurers to offer the plans in the future.

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