Out-of-Pocket Spending Caps Protect Families in Illinois

March 23, 2011 marks the one year anniversary of the Affordable Care Act (ACA), landmark legislation in the fight to ensure quality affordable health care for all Americans. To celebrate this milestone, the Campaign for Better Health Care and the Health Care Justice Campaign have announced that March is Health Care Justice Month in Illinois.

"We want to look back at the new benefits that are already helping Illinois' working families and look ahead to the benefits that are yet to come," said Jim Duffett, Executive Director of the Campaign for Better Health Care (CBHC). "It is amazing that so many Illinoisans are already experiencing a positive impact from this law, and inspiring to realize how many more will in the near future."

To kick off Health Care Justice Month, CBHC co-released a report by Families USA examining how the health care spending caps in the ACA will positively affect Illinois families. The health care cost cap provision does not kick in until 2014, but until it does, the resulting analysis for Illinois spotlights the tremendous need for spending caps to protect family budgets:

• In 2011, 590,500 Illinoisans under the age of 65 are in families that will spend more than the out-of-pocket caps for services that will be covered in the Affordable Care Acts essential benefits package.
• The Affordable Care Act spending caps, when adjusted to 2011, would be $5,950 for individuals and $11,900 for families. Out-of-pocket health care spending by these Illinois families will exceed the caps by more than $1.0 billion in one year alone.

Health Care Justice Month will feature online activities like a poll on the benefits of the Affordable Care Act and events across the state, including a postcard campaign, a series of Minority Health Care Roundtable discussions, and the Campaign for Better Health Care Faith Caucus' annual Sound the Alarm Sabbath weekend. During Sound the Alarm, congregations of all faith traditions reflect upon the moral imperative of health care reform, and sound a traditional musical instrument 18 times to mark Illinois' 1.8 million uninsured.

The Families USA report, Worry Less, Spend Less: Out-of-Pocket Spending Caps Protect Families in Illinois, found that more than nearly three-quarters (71.7%) of the Illinoisans who will spend more than the out-of-pocket caps an estimated 423,700 people are in working families.

John Bouman, President of the Sargent Shriver National Center on Poverty Law said, "As demonstrated by Families USA's excellent report, the caps on families' out of pocket health care spending that will go into place under the ACA in 2014 will be extremely important to the financial well-being of working families and small businesses."

In particular, employees of Illinois small businesses, those with fewer than 100 employees, face the threat of high out-of pocket health care spending:

• An estimated 239,500 Illinoisans in families where the head of the household is employed by a small business will spend more than the out-of-pocket caps.
• More than two in five Illinoisans (40.6%) who will spend more than the out-of-pocket caps are in families where the head of the household works for a small business.
• Of those Illinoisans in families of small business workers, more than four-fifths (82.0%) have a head of household who works for a business with fewer than 25 employees.
• Families of Illinois small business employees will spend nearly $414.0 million more than the out-of-pocket caps in 2011 alone.

Janine Lewis, Executive Director of the Illinois Maternal and Child Health Coalition, added, "We applaud these caps which will help women and children afford access to critical health services to keep themselves and their families healthy."

"Two decades of rising health care costs have squeezed families into coverage with higher premiums, higher copayments, and higher deductibles, and sometimes these costs have forced families out of health coverage altogether," Ron Pollack, Executive Director of Families USA, said. "These families are terribly vulnerable to financial devastation caused by unexpected illness or injury, and they generally face only bad alternatives, including massive credit card debt, bankruptcy, even foreclosure."

"The report from Families USA clearly shows that 590,500 Illinoisans, and nearly 15 million people across the nation, will deal with this kind of health and financial crisis this year alone. 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 Illinois."

Pollack noted that between 2000 and 2010, the average premium for job-based family coverage grew from $6,438 to $13,770, an increase of 114 percent. These increases have been a special burden for small businesses, which, because of lower buying power and proportionately greater administrative costs, pay, on average, 18 percent more than large businesses for a comparable health insurance plan.

"These caps will be of special value to small businesses and the employees of small businesses," Pollack said.

The spending cap provision of the Affordable Care Act includes a sliding scale that will ensure those with lower and middle incomes will pay less out of pocket than those with higher incomes. "Access to affordable health coverage is the key to economic security and opportunity for the working families and small businesses of Illinois," said Jim Duffett. "This provision of the Affordable Care Act ensures that they will now be able to get a fair deal."

-- Kathleen Duffy, Campaign for Better Health Care