shoppers struggle to determine out-of-pocket costs

Despite the Affordable Care Act's call for standardization and transparency in health insurance pricing, consumers still struggle to determine what exactly a plan sold on will cost them, according to new research from the Kaiser Family Foundation (KFF).

The ACA's tiered plans--bronze, silver, gold and platinum--each have a set actuarial value. This is the percentage of costs an insurer will pay compared to an enrollee. For the silver plan, which is the most common policy sold on, the actuarial value is 70 percent, KFF said. This means an insurer expects to pay 70 percent of total medical costs associated with a particular plan, with the enrollee paying the remaining 30 percent.

How that enrollee will pay his or her share comes down to cost sharing. These out-of-pocket costs include copays, deductibles, coinsurance or a combination of the three.

Collectively, these can drive down the cost of monthly premiums--achieving the ACA's goal of making health insurance more affordable. However, they can also lead to confusion when shopping for plans and, as a result, unexpected costs when medical bills arrive.

The KFF report included the example of two silver plans offered in Pennsylvania, both with the actuarial value of 70 percent. One had a $4,500 deductible, $10 copays and no cost sharing for inpatient care; another had no deductible, $50 copays and 50 percent coinsurance for inpatient care. In addition, changes to out-of-pocket costs for 2015 compared to 2014 varied considerably among exchange plans.

Even with the ACA's provisions for standardizing health plans--including actuarial value, coverage for essential health benefits, out-of-pocket limits and cost-sharing reduction plans, which save qualified enrollees an average of $479 per year--"[T]here is still considerable variation in the design of plans being offered on the federal marketplace," KFF concluded. "It is important that enrollees consider the cost of using their plan as well as the premium when they are shopping for coverage."

That's a large part of the reason why the National Partnership for Women & Families says health insurance marketplaces can do more to improve transparency, FierceHealthPayer previously reported.

For more:
- here's the Kaiser Family Foundation report