Reform Update: Feds stand firm; patients in certain plans will face higher out-of-pocket costs

Patient advocacy groups seeking to protect patients with chronic conditions from an exception that could increase out-of-pocket spending beyond the limits set in the federal healthcare reform law aren't happy with the terse response they received on Tuesday from the U.S. Labor Department.

The government's response indicates that patients could face much higher out-of-pocket costs than the limits established by the Patient Protection and Affordable Care Act.

The Labor Department told patient groups, including the National Health Council, Easter Seals and the Epilepsy Foundation, that it won't reverse its policy issued in February for the millions of Americans who have either group coverage through their employer or buy individual health insurance.

The ACA set limits for out-of-pocket costs at $6,350 for individuals and $12,700 for families, both in group and individual insurance products. But an exception gives certain small-group and non-grandfathered individual plans a one-year grace period to comply with the ACA. Plans using multiple claims payers will have until 2015 to comply with the ACA and implement unified out-of-pocket limits.

From a patient's perspective, that leaves them vulnerable to higher out-of-pocket costs than what the ACA allowed, said Marc Boutin, executive vice president and chief operating officer of the National Health Council. Health plans with multiple vendors could charge a patient the maximum out-of-pocket for each vendor. For example, a patient could get a $6,350 bill for medical costs and another $6,350 bill for drug benefits. A letter signed (PDF) by 107 patient groups was sent in April to the government protesting the policy. Now four months later, the government responded via e-mail saying the policy will stand.

“Unless or until further guidance is issued on this topic, that temporary policy will apply as stated in the FAQ guidance,” the Labor Department's e-mail read.

Boutin said he was surprised by the response, but his group and others will continue to fight it. “I thought this was an issue that would turn the administration around on,” he said.

Patient groups in their April letter said the exception would “have an enormous negative impact on patients,” with the potential to double the out-of-pocket limits for certain health plans issued through state exchanges.

Boutin understands the need for the grace period so everyone could come into compliance, but he asked why the government couldn't set lower limits for vendors instead of leaving patients in the position of facing higher costs.

The conservative Heritage Foundation is calling the ACA's fast-food menu labeling provision a waste of $537 million.

There's not enough evidence to support the idea that menu-labeling will affect people's caloric intake in restaurants, Daren Bakst, of the conservative policy group, wrote.

The FDA estimated the cost of implementing the menu rule at $537 million. Bakst said it's not the government's role to require businesses to include that nutritional data on their menus.

“Choosing higher-calorie meals, for example, is not necessarily evidence of being misinformed,” he wrote. “Nutritional concerns are not the only consideration or even a significant consideration when consumers go to restaurants. For many, calories may be the last thing they want to think about when going out to meals.”

He called for the menu provision to be repealed, as well as the “complete defunding of Obamacare.”

President Barack Obama compared his healthcare reform law to his new effort to privatize the mortgage lending business, saying he wants to rely on the “free market” in both economic areas.

In a speech Tuesday in Phoenix on his housing policies, he said: "I actually believe in the free market and just like the healthcare law that we put in place—Obamacare."

"If you don't have health insurance or you're buying it at exorbitant rates on the individual market, starting on Oct. 1, you can join a marketplace and be part of a pool that gives you much lower premiums, saves you a lot of money," Obama said.

Then he returned to his prepared speech: "But, in the same way that what we did with healthcare was to set up clear rules for insurance companies to protect consumers, make it more affordable but still built on the private marketplace, I believe that our housing system should operate where there's a limited government role.”

Keeping in step with the GOP letter, while discussing the future of his party on Tuesday, former Republican presidential nominee Mitt Romney warned congressional Republicans that blocking budget legislation and shutting down the government to defund Obamacare could have dire political consequences for Republicans. ">Associated Press reported.

“I'm afraid that in the final analysis, Obamacare would get its funding, our party would suffer in the next elections, and the people of the nation would not be happy. I think there are better ways to remove Obamacare,” Romney said.

Romney's remarks came during a fundraiser for the New Hampshire Republican Party.

Follow Ashok Selvam on Twitter: @MH_aselvam