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A closer look at new HHS guidance on maximum out-of-pocket spending

MOOP expansion could increase costs, admin burdens for plans and issuers

There are plenty of big issues on the agenda at the America's Health Insurance Plans' (AHIP) annual meeting this week. But Leapfrog Group President Leah Binder is calling attention to a lesser-known federal health regulation: embedded maximum out of pocket (MOOP) costs.

MOOP is the maximum amount consumers pay to a health plan in a given year. After consumers pay their deductibles and copays--and reach their MOOP--health plans pick up 100% of the tab for the remainder of the year.

Embedded MOOP is the out-of-pocket maximum for family plans, which can be two or three times higher than for individuals. The members under the family plan had to collectively hit the maximum before benefits would kick in.

For some high-deductible health plans, however, that's changed under an FAQ clarification issued by the Department of Health and Human Services. It says MOOP applies separately to each individual embedded in a family plan--each individual with coverage has his or her own cap.

For the nearly 17.5 million Americans who have coverage that fall under this new MOOP rule, their plans do not cover the rest of the cost--their employers do, Binder. notes in her Forbes column.

So if employers are down millions of dollars thanks to this new regulation, many may raise employee premiums, decrease wages or reduce benefits. Additionally, premiums for family coverage will likely rise due to this new rule, she writes.

In a statement earlier this week, Groom Law Group warned its clients to act quickly to make the necessary changes to their plans in implementing the new embedded MOOP requirement.

"The requirement to apply an embedded MOOP with respect to other than self-only coverage is likely to result in increased administrative costs and burdens for plans and issuers, as well as increased utilization," the firm notes.

For more:
- here's the Forbes article
- check out the Groom statement (.pdf)
- here's the HHS FAQ (.pdf)

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