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What’s the highest deductible allowed under ObamaCare?

Here's what you need to know...
  • Obamacare sets a maximum for out of pocket expense per year
  • The maximum out of pocket expense includes deductibles
  • The maximum out of pocket for 2016 is $6,850 for an individual plan
  • The maximum out of pocket for 2016 is $13,700 for a family plan
  • Once the consumer reaches the deductible limit, the insurance provider pays its share
  • Once the subscriber exceeds the total out of pocket limit, the insurance pays all covered costs.

Deductibles vary by policy, but they may not exceed the overall limit for out of pocket expenses set for each calendar year. Comparison shopping is an excellent tool for matching needs with benefits. The 2016 limit for individual plans is $6,850. Deductibles can be equal to or lower than the limit for out of pocket expenses per year. Deductibles cannot be higher. The maximum deductible is that for a catastrophic plan that is an emergency type of coverage. Comparison shopping is a proven method for finding the best fit for health insurance plans when out of pocket and total costs are a major consideration. Compare health insurance plans now by using our FREE tool above!

Reducing the Impact

Obamacare subscribers can get payment assistance for deductibles through the cost sharing reduction subsidies . They raise the actuarial value of a plan so that the maximum payout for deductibles is lower and more in line with higher level silver and gold type plans.

While the Cost Sharing Reduction benefits only apply to covered items, they will reduce overall costs.

Cost sharing reductions do not affect benefits not covered under the given plan; these may require complete payment from the consumer. Covered costs include the essential health benefits in the plan and these are valuable and frequently used protections. The below-listed expenses count towards the out-of -pocket limit for all marketplace plans.

  • Deductibles
  • Coinsurance
  • Co-payments
  • All other consumer expenditures for essential health benefits

Silver Plans with CSR

Cost-sharing reduction subsidies reduce the plan’s deductible, out of pocket amount, and the annual maximum out of pocket amount. The government applies the subsidies based on income with the maximum for those between 100- 200 percent of the FPL. Those between 200-250 percent of FPL get a lower rate of subsidy but still a substantial lowering of the deductible and maximum out of pocket limit. Comparison shopping can indicate the costs with the CSR against plans that do not have this feature. One can choose lower premiums such as Bronze plans, or lower deductibles with the Cost Sharing Reduction.

Silver Plans with HSA

These plans use an IRS formula rather than the HHS formula to set maximum limits. The IRS formula uses the federal poverty guideline to determine the maximum out of pocket and deductible expense levels. Health Savings Accounts double as a source of money for current year out-of-pocket expenses. They also rollover year-after-year if not used for medical expense. The rollover amounts accumulate to form a significant healthcare asset. Comparison techniques can help determine the advantages of Silver with HSA and Silver with CSR.

Qualifying for CSR

There are income tests as well as limits on the plan selections that get the CSR benefit. The qualified incomes are from 100 percent to 250 percent of the federal poverty guideline. The plan selection requires a silver plan, as the rules permit the CSR subsidies on silver plans only. The CSR does not lower premiums; Obamacare lowers monthly premiums with advanced premium tax credits. Comparison shopping can help consumers weigh the benefits of cost sharing reduction over plans with lower premiums

Types of Plans

Comparison shopping helps define the advantages of each of the four types of plans. The four metal bands and the catastrophic plan each contains deductible limits. The essential relationship between premiums and deductibles is inverse. High premiums go with low deductibles and extensive plan coverage. All are lower than the out-of -pocket limit except the catastrophic plans. The below-listed descriptions compare the metal plans and deductibles.

  • Platinum has lowest deductibles and highest premiums. Platinum health plans cover 90 percent of the essential benefits in the plan.
  • Gold has high premiums and low deductibles, it strikes a balance with plans that cover 80 percent of the essential benefits.
  • Silver Plans cover 70 percent of essential health benefits, and they have moderately high deductibles.
  • Bronze level plans cover 60 percent of essential health benefits, and they have the lowest percentage of premium expenses and the highest deductibles among the metal bands.
  • Catastrophic Plans have highest deductibles. Catastrophic plan deductibles are as high as the overall limits on out of pocket expenses.

Deductibles and Preventive Care

The impact of deductibles on health is critical. The ACA provides for no cost screening and examinations to detect potential problems. They emphasize wellness and preventive care. When doctors diagnose illnesses, consumers must pay for the costs until they reach the deductible limits.

Once the deductible is exceeded insurance kicks in to pay most of the expenses.

Insurance pays all of the expenses over the out of pocket maximum. Many people defer action on treatment when treatment costs and expenses exceed their ability to pay, and this reduces the effectiveness of preventive care. Comparison shopping is an effective way to get the most for one’s insurance dollar.

Balancing High Deductibles

Many consumers will find deductibles are too high and put health care on a path that leads to increased debt. There are many tax advantages and incentives in the ACA that can help. The first is to shop thoroughly and compare features. Plans have a wide range of premiums and deductibles. Comparison shopping can point the way to the best combination of local and away medical care and lower copays and coinsurance. One must use the advantages to the maximum such as starting a small business and getting tax credits and the tax advantages of deducting health care premiums from taxable income. Many small businesses can deduct premiums and this is a major cost saving for an individual that can also file as a small or micro business.

Deductibles Limited by Maximum Out of Pocket

Obamacare limits deductibles in two ways. It limits deductibles by terms of the plans and the overall limit on out of pocket expenses. The maximum deductible is the amount in each plan that consumers must pay before insurance benefits begin. It is less than the overall limit on out of pocket expenses set by rule for each calendar year. Deductibles vary by the type of plan and actuarial values built in. Comparison shopping can focus on the level of deductibles when choosing an insurance plan.

Deductibles are important in Obamacare plans because they represent the contract costs consumer’s pay, and the mechanism that triggers insurance coverage of benefits.

Until one reaches the deductible, no insurance payments occur except for certain emergency conditions. The deductible relates to the premium in that high premiums indicate lower deductibles. Premium payments do not qualify as deductible amounts. Comparison shopping is a consistent method for identifying the benefits that matter most to an individual or family. It can isolate the choices that offer the best level of deductibles and balance that feature with agreeable premium costs.

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Until one reaches the deductible, no insurance payments occur except for certain emergency conditions. The deductible relates to the premium in that high premiums indicate lower deductibles. Premium payments do not qualify as deductible amounts. Comparison shopping is a consistent method for identifying the benefits that matter most to an individual or family. It can isolate the choices that offer the best level of deductibles and balance that feature with agreeable premium costs.

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