I got a call last week from a woman who has a health insurance policy with a $100,000 lifetime coverage limit. This means the insurance company won’t pay any more than $100,000 in insurance claims for this lady, who is 61 years old.  When the limit is met, the insurance policy is canceled – and this lady will have no health insurance.

Jane (not her real name), got this policy a few years back when her husband retired and went on Medicare.  Jane needed to get individual health insurance and wanted to keep her monthly premium  low.  So she “took a chance” (as she said) and signed up for a policy with a fairly low lifetime limit of $100,000.

Jane told me she had always been healthy, so she figured she wouldn’t need more than $100,000 in medical care over a six year period until she would get Medicare.  She said she was hiking Mt. Lemon one weekend and the next week she was in the hospital having triple bi-pass surgery….and worrying about her health insurance.

If Jane’s medical bills exceed $100,000, she will no longer have health insurance. She wanted me to help her get new coverage. Unfortunately for Jane, she is probably un-insurable with her recent medical history and her pre-existing heart condition.  I gave Jane a list of things she can do to see if she can get health insurance  – but I think she is in big trouble.

I told Jane that the Affordable Care Act (aka “Obamacare”) requires lifetime limits for health insurance policies be raised each year until there will be no limit in 2014. The minimum coverage limit this year is $750,000. But the law applies only to plans sold after September 2010. Jane bought her policy two years ago, so it should be exempt from the new requirements… meaning she is out of luck.

A 2009 report by Price Waterhouse Coopers (PwC), a major accounting/consulting firm, looked at the impact of lifetime limits on individuals, insurance premiums, and Medicaid.

Findings from the study:

In 2009, 55 % of people who got their health insurance from employers were subject to lifetime limits, and this number was growing as health insurance premiums continue to rise each year.

The most common lifetime limits on health insurance policies were $1 million or $2 million in 2009.

20,000 to 25,000 people hit their lifetime limit in 2009 – meaning they no longer had health insurance, even though they were employed. The study projected that over 300,000 people would hit their lifetime limits by 2019 because of rising health care costs.

Increasing lifetime limits from $1 million to $5 million would increase premiums by only $3 per month, or .6% for an individual. Family plan premiums would rise by about $8. Increasing limits to $10 million would increase premiums by one-tenth of one percent according to the study.

Because many people who lose their health insurance end up on Medicaid, states would save $1 billion in 2010 if lifetime limits were raised or eliminated.

So it is clear that raising (or eliminating) lifetime limits will save the government money and will protect the health  and finances of working people –  and people like Jane.

This is one more example of how the Affordable Care Act is helping people while saving the government money.  So why do Republicans want to repeal it?

Yesterday I had a conference call with “Alonzo”, who is from Tucson, and Golden Rule Insurance. I waited more than ten minutes to talk to a Golden Rule representative. Then I got Alonzo on the phone. We  talked for five minutes and explained Alonzo’s situation. We asked to talk to someone who understood the type of policy Alonzo had. We waited another ten minutes to be transferred to someone who could, hopefully, explain exclusions in his health insurance policy.  We talked for maybe three minutes with a representative who had Alonzo’s information on her computer screen. We gave her information, asked her several questions, and then we got cut off.  Alonzo waited for a phone call from this Golden Rule representative, but the phone call never came.

How can a billion dollar company not follow-up on a dropped call from a client who has already paid them over $4,000 in premiums?  Alonzo’s story is complicated and frustrating.

Alonzo works for a small construction company that dropped its group health insurance because the premiums got too expensive, despite rising deductibles and co-pays each year.  Alonzo figures he paid over $80,000 in health insurance premiums over 20 years and he was never really sick all that time.  He is overweight and pre-diabetic, and at 64 he was about to be uninsured.  To make things worse, Alonzo was diagnosed with prostate cancer just as he was losing his group insurance.

Alonzo applied for coverage with Blue Cross Blue Shield and was rejected because of his pre-existing conditions (and this was before he knew about the prostate cancer).  His only choice for coverage was to use the Health Insurance Portability and Accountability Act (HIPAA) which is a federal law from 1996 that requires insurance companies to offer a health insurance policy to people who have had group insurance, but lost it.  People who would not qualify for individual health insurance due to pre-existing conditions can get a guaranteed issue health insurance policy under HIPAA.

The HIPAA law has several requirements, all of which Alonzo met.  The HIPAA law also lets insurance companies take their premium rate for a healthy person, add ten percent to it, and triple that number.  So Alonzo would pay over $1,400 per month for the Golden Rule policy which has a $3,500 deductible.  He chose to pay this premium to protect his family from financial ruin that can come with serious illness and no health insurance.

Alonzo arranged for treatment of his prostate cancer, and the oncology center contacted his insurance company to check on his coverage.  Golden Rule said Alonzo is covered, but there is a six-month exclusion for treatment of “reproductive organs”, and the prostate falls under this exclusion.

Alonzo called me and I did some research about HIPAA policies, but I think we need an expert’s help on this.  Does the HIPAA law allow insurance companies to charge ridiculously high premiums for people with pre-existing conditions and then offer a policy that excludes treatment for those pre-existing conditions?

Alonzo doesn’t have time to wait for answers.  And he may have missed his one chance to get decent (though expensive) coverage under the HIPAA law by choosing the Golden Rule plan. This is an example of why I hate individual health insurance and why I concentrate on Medicare.

UPDATE Thursday, January 6, 2011:  Golden Rule did call! And it turns out the problem was all a mistake, or mis-communication……and Alonzo has no exclusions in his policy.  See my Jan. 6th post for more details.

From the Associated Press on Nov. 1, 2010:

Humana Inc.’s third-quarter net income climbed 30 percent partly on a jump in Medicare Advantage enrollment and because the health insurer’s claims leftover from previous quarters came in lower than expected.

Humana said it earned $393.2 million, or $2.32 per share, for the three months ended Sept. 30. That’s up from $301.5 million, or $1.78 per share, a year earlier.

Revenue rose 9 percent to $8.42 billion.

Humana also said its Medicare Advantage enrollment climbed 17 percent in the third quarter to more than 1.7 million people. Humana is the second largest provider of Medicare Advantage plans, trailing only UnitedHealth Group Inc.

Medicare Advantage plans are privately run versions of the government’s Medicare program. They provide health coverage for the elderly and disabled. Subsidized by the government, the plans offer basic Medicare coverage topped with extras or premiums lower than standard Medicare rates.

Aside from Medicare Advantage, Humana also offers Medicaid and commercial coverage and insurance for military members and their families.

From Medical News website, on October 19, 2010

UnitedHealthcare Medicare & Retirement (formerly Ovations)

Third quarter Medicare & Retirement revenues of $8.8 billion grew $886 million or 11 percent year-over-year. This strong growth included revenue advances in the Medicare Advantage, Medicare Supplement and Part D prescription drug businesses. The Medicare & Retirement business has increased its customer base in primary offerings by 615,000 people in the past 12 months.

In Medicare Advantage, the Company brought its services to 290,000 more seniors in the past year, a 16 percent year-over-year increase, including net growth of 20,000 seniors served in the third quarter.

Growth in active Medicare Supplement products continued, with the number of seniors served increasing by 90,000 or 3 percent in the past 12 months, including 25,000 people in the third quarter of 2010.

As of September 30, 2010, 4.5 million people participated in the Company’s stand-alone Part D prescription drug plans, an increase of 235,000 people over the past 12 months.