Maximum Out-of-Pocket Is 37% Higher Than It Was in 2014
An out-of-pocket maximum is the most that an insured person will have to spend in a given year on covered, in-network essential health benefits. The Affordable Care Act (ACA) and subsequent annual regulations set caps on how high a health plan’s maximum out-of-pocket can be, but these limits tend to increase each year. This article will explain the rules that apply to out-of-pocket caps and why they tend to increase over time.
If you have a health plan that’s compliant with the ACA, your out-of-pocket maximum for in-network care is no more than $8,700 in 2022. If you have more than one person covered on your plan, the combined family out-of-pocket maximum can’t exceed $17,400,1 although the plan must have an embedded individual out-of-pocket maximum that can’t exceed $8,700.
Out-of-Pocket Max Increasing Again in 2023
For 2023, the maximum allowable out-of-pocket limit will be $9,100 for an individual and $18,200 for a family.
It’s noteworthy that this is actually the limit that the Department of Health and Human Services (HHS) initially proposed for 2021.4 But when the final Notice of Benefit and Payment Parameters for 2022 was published in May 2021, the amounts had been revised and lowered. The maximum allowable out-of-pocket limit for ACA-compliant plans in 2022 is $8,700 for an individual and $17,400 for a family.
We’ll get into the specifics in a moment, but it’s important to note that the 2022 rules were proposed under the Trump administration, but finalized under the Biden administration. Public comments on the proposed $9,100 maximum out-of-pocket for 2022 were overwhelmingly negative, asking the administration to take action to ensure that out-of-pocket maximums wouldn’t be as high as initially proposed.
Two years earlier, HHS had finalized—despite widespread public opposition—a new methodology for how the out-of-pocket maximum amounts would be determined, and it resulted in higher amounts. Under the Biden administration, in response to continued public opposition, HHS has reverted to the previous methodology for 2022 and beyond. This is why the final maximum out-of-pocket for 2022 is $8,700 for an individual, instead of $9,100.
Although the annual increase for 2023 has brought the maximum out-of-pocket to $9,100, it would have been even higher if the Trump administration’s methodology had been kept in place.
There will continue to be numerous plans available in 2023 with out-of-pocket maximums that are well below $9,100. But no ACA-compliant plans will be able to have out-of-pocket maximums above $9,100.
For perspective, the out-of-pocket maximum in 2014—the first year that ACA-compliant plans were available—was $6,350 for an individual and $12,700 for a family. So as of 2023, the cap on out-of-pocket maximums will have increased by about 43%. But if the new methodology (implemented by the Trump administration in 2020) had continued to be used, the overall increase would have amounted to 43% by 2022, instead of hitting that point in 2023.