The third post in our series highlighting the benefits of the Affordable Care Act.
Most of us don’t think much about the fine print in our health insurance, especially something like a lifetime cap on our benefits.
But the majority of us – an estimated 55 percent of people with insurance through an employer – have health plans that are subject to lifetime caps. This means that once a family member spends up to a certain amount on health benefits, the insurer will no longer pay for any health services – the family must pay all health expenses out of pocket.
Most families only realize they have a lifetime cap on their health plan because of a serious illness that becomes very expensive. A family may run out of their health benefits at precisely the time they are most needed. This places an enormous burden on those already dealing with a serious illness, and can lead to a family going into debt to pay for necessary care. A recent national survey found that one out of six nonelderly adults—about twenty-nine million people—had medical debt.
Diane and Bill Pickles of Haverhill, Massachusetts know how terrifying the idea of a lifetime cap can be. The couple had a policy with a $1 million lifetime cap when their son, Jake, was born with severe heart damage. In his first two years of life, Jake required three open heart surgeries, countless tests, doctors’ visits and prescription drugs. By the time he was 4 years old, Jake was already halfway to his $1 million dollar benefit cap. Diane remembers making the awful realization that they could easily hit Jake’s lifetime cap within a few years and be left with no protection for Jake’s life-saving medical treatments.
Fortunately, after Jake’s three surgeries, Diane was able to return to work and was offered the opportunity to switch to her new employer’s insurance plan with no lifetime limit. “I never thought we would need a million dollars in medical care,” she said, “but all it takes is one diagnosis like Jake’s before you realize one million might not take you so far.”
As of Thursday, September 23rd, lifetime caps will be prohibited in ALL health plans – whether offered by small or large (or self-insured) employers, or purchased directly by an individual. This means the next time your health plan is renewed it will no longer have any lifetime cap. Families like Diane’s – and the estimated 20,000 others who reach their lifetime caps in one year – no longer have to worry about their health benefits running out when they most need them.
— Christine Barber, Senior Policy Analyst