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?