Report Highlights Importance Of Caps In Health Care Spending

NJBIZ — Wednesday, February 9, 2011

By Laura Mortkowitz

As challenges continue to mount for the federal health care reform law President Barack Obama signed last year, a report released Wednesday by the nonprofit advocacy group Families USA and The Lewin Group highlights the importance of spending caps in keeping down consumers' costs.

The report shows most who currently are spending above the cap limit would stand to benefit: In 2011, the report predicts, almost 318,000 New Jerseyans younger than 65 will spend more than the cap on out-of-pocket health care. Of those, almost 70 percent are in working families. Caps are scheduled to be introduced as part of the law in 2014.

Out-of-pocket costs cover co-payments and deductibles, and according to Families USA executive director Ron Pollack, a cap is important to make sure families aren't spending more on health care than they can afford.

The report also predicts in 2011 alone, out-of-pocket spending by New Jersey families will exceed the caps by $545.2 million.

"The caps on out-of-pocket spending that will be put in place by the Affordable Care Act will have a profound beneficial impact on the fortunes, finances and futures of families in New Jersey," Pollack said.

"These new caps on out-of-pocket caps on health care expenses will help us all figure out what exactly our health insurance is going to cost us," said Crystal Snedden, health care campaign coordinator for the activist New Jersey Citizen Action.

According to U.S. Rep. Frank Pallone Jr. (D-Long Branch), the health care reform legislation is so important because so many aspects of it limit costs, whether it's through capping out-of-pocket expenses, lowering premiums or cutting out lifetime and annual caps on health care costs.

"In a high-cost state like New Jersey, these things are important, to be able to use the money that you would use to pay for out-of-pocket health expenses and instead use it to pay your utility bills or your phone," he said. "That's crucial in New Jersey."

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