How can there be an actuarial value of X% AND an out of pocket cap?

[Hello_Kitty]

Say I buy a plan in the exchange with a 70% actuarial value and I have an illness that costs $50K to treat. The insurance company has to pay for $35K of that. Say I have an out of pocket maximum of $5k, according to whatever bill is passed. How's that gonna work? Does the insurance co. just eat it and them pass the costs along in premium/subsidy increases? Anyone know?

[damntexdem]

1. That already works in current insurance.

If you have a cap, you pay your part up to that, then the insurance company has to pay the full freight. Of course, they also dictate to the provider what the full freight is.

[johnaries]

2. Yep, and with a 70% MLR. By tightening the caps and doing away

with pre-existing restrictions as well as premium increases, the MLR will go up a little but not to the 80-85% required once you add in the mandated. Which means that the insurance company will have to lower their premiums in order to maintain the required MLR.

[Hello_Kitty]

3. I understand that but with a subsidized plan does it work the same way?

Does the insurance co. eat the excess and then pass the costs on via premiums?

[quiller4]

7. The insurance co eats it. Premiums are set with a predicted value of

such losses. This is not new.

[mdmc]

4. your situation is very different then mine

and I've only been able to look into how this might effect the working poor that have insurance through their current employer.

[Hello_Kitty]

5. It's not my situation at all. I'm unemployed and uninsured.

I'm just trying to figure out why there are different actuarial benefits to plans when there are going to be set out-of-pocket limits in a subsidized plan.

[mdmc]

8. ah

dig it

[quiller4]

6. You pay up to your cap. Either the insurance co eats the balance or

negotiates an arrangement with the provider for discounted payment. That happens now the only difference is that most out of pocket caps now are higher than they would be after passage of either house or senate bill.