Three Terrifying Words: Lifetime Maximum Benefit

As I was conducting my experiment to see what I could get on the individual insurance plan market, one selling point that most plans had in common was "No Maximum Benefit Limit."  The likeliest reaction for people reading those words is "Cool - I didn't even know I needed that, but I'm glad I have it."  After all, given the amount of money you and your employer are regularly paying to the insurance company, and the myriad ways that insurance nickels and dimes you through denying claims, requiring pre-approvals and cherry-picking customer likely not to require a lot of care in the first place, they're making money hand over fist.  If they let you into their policy, they shouldn't be able to kick you out because you need care, should they?  If they can, why is no one talking about this?

Whether they should or not, they often can.  According to a survey by Kaiser Family Foundation, 55% of employer-based insurance plans have Lifetime Maximum Benefit Limits of either $1-2 million or above $2 million.  That's a better than 50-50 chance that your plan does as well.  This option is becoming more widely-used as employers look for ways to trim the rising cost of health care without trimming the benefits their employees would miss - their co-pay prices, employee contributions, provider networks, etc.  Now $2 million dollars may seem like a lot, particularly if you're relatively healthy, but Brigette Courtot of the National Woman's Law Center shows how the sudden onset of a catastrophic trauma or chronic disease can get you close to that maximum limit in no time:

• "Coronary Artery Disease (the leading killer of women in the U.S.): over $1 million
• Multiple Sclerosis (which affects twice as many women as men): $2.2 million
• Single Kidney Transplant: $500,000
• Spinal Cord Injury: between $624,000 and $2.8 million
• HIV Care: $618,000
• Autism: over $300,000"

Sadly, the way most people learn that they have such a limit tends to follow a story I received from a reader of this blog, herself a health care provider:

"In December I received a phone call from my benefit plan informing me that I am nearing my Lifetime Maximum Benefit Limit.  I was not aware that my benefits were limited to a million dollars, and once I have used that amount in medication, doctors visits and services, THAT'S IT.  I was shocked.  I asked, 'Then what do I do?'  The woman said I could apply for Medicare, but at 40 years old, I am not eligible.  I have neuromuscular disease which left me completely disabled for 4 months in 2005, and I was only able to get back to work because of expensive IVIG treatments which cost $16,000 per month.  I am only able to function, go to work, and attend to my patients because of my monthly infusions.  Now I think I will be covered for about another 6 years, but after that, what do I do?"

To go all Bob Dole on this, where's the outrage?  You'll notice this is prevalent in employer-based insurance, not so much in the individual market.  The why is obvious - individuals often presume that their coverage is good and that their employer has negotiated the best deal.  Individuals need to be coaxed to buy the expensive package, and are more likely to nix something that so obviously underinsures them.  Rep. Anna Eschoo has introduced HR 1085 to specifically address this problem, but the bill's prospects are questionable.  We need to make sure people know that this is just as important as community rating and forbidding pre-existing conditions.

After all, if your coverage disappears when you need it the most, how does that benefit anyone... except the insurance industry's bottom line?

(Photo credit:  jasonEscapist on Flickr.com)