Reform plan caps out-of-pocket expenses

The White House is fighting chain e-mails with chain e-mails. 

After spending days responding to inaccurate e-mails about the health care reform plan, the White House responded with its own e-mail from David Axelrod, senior adviser to President Barack Obama. The subject line was "Something worth forwarding."

Axelrod began his e-mail with a list of ways that reform provides "security and stability to those with or without coverage."

One of his claims is that refom "ends exorbitant out-of-pocket expenses, deductibles or co-pays: Insurance companies will have to abide by yearly caps on how much they can charge for out-of-pocket expenses."

We recognize that "exorbitant" is subjective, but we thought it would be helpful to research whether Axelrod is right that the plan limits charges that a typical person or family would find excessive.

The main health care reform bill in Congress does set annual limits on out-of-pocket expenses. That means there's a cap on what people would have to pay in a year for medical costs. And insurance companies won't be allowed to require patients to pay for preventive treatments such as check-ups.

In the House legislation, outlined in section 122, the annual cap on out-of-pocket expenses is $5,000 for an individual and $10,000 for a family. Those numbers are indexed for inflation.

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The policy would be phased in. Employer-provided policies would have a grace period of five years, as outlined in section 102, before they are required to comply with the caps. If you get a new individual policy through the health care exchange, it would have to comply right away.

We asked Sara Collins of the Commonwealth Fund about the caps. The Commonwealth Fund is a nonpartisan private foundation that advocates for a better health care system. She said the caps are a good form of consumer protection.

Axelrod is correct that the main health care reform bill requires insurance companies to "abide by yearly caps on how much they can charge for out-of-pocket expenses." But ending "exorbitant" out-of-pocket expenses, deductibles or co-pays? 'Exorbitant' may be in the eye of the beholder. For a family, $10,000 in the course of a year can be a serious financial hit. (The median income for a family of four is $67,000.) Still, the new limits are better than nothing, and health care advocates praise them as an important safeguard for consumers. So we rate Axelrod's statement Mostly True.