Examining Lifetime Health Insurance Caps

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The Philadelphia Inquirer on Monday, as part of a continuing series called "Falling Through: Casualties of the Health Insurance Crisis," examined how more U.S. residents appear to be reaching lifetime benefits caps on their health insurance policies because of rising health care costs.

According to a survey by the Kaiser Family Foundation and Health Research and Educational Trust, more than half of all employer-sponsored health plans have lifetime caps. Mary McElrath-Jones, a spokesperson for UnitedHealthcare, said, "The primary reason for ... caps is to lower the cost of insurance so employers can cover as many people as possible." According to the Inquirer, "People in need of organ transplants, or with rare blood diseases, chronic illnesses, or cancers that require expensive therapies tend to be most likely to hit a lifetime cap."

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Gary Claxton, a Kaiser Family Foundation vice president and director of the Foundation's Health Care Marketplace Project, said, "What insurance is supposed to do best is handle the extraordinary thing that is rare," adding, "So to some extent, these policies are not protecting the people who most need insurance. These people did everything they were supposed to do. They were paying their premiums. Insurance companies are finding ways to limit exposure of these policies to really sick people."

The Inquirer profiled a 44-year-old woman who lost her job after she was diagnosed with acute myeloid leukemia. After 16 months of paying for COBRA insurance, she was informed that she no longer would receive coverage because she had reached her lifetime maximum coverage of $2 million, according to the Inquirer.

The woman has more than $16,000 in medical debt and cannot afford private insurance. In addition, she does not qualify for Medicaid and will not be eligible for Medicare until November 2009 because of a two-year waiting period imposed for disabled disability benefits (Vitez, Philadelphia Inquirer, 12/15).

Reprinted with permission from kaisernetwork.org. You can view the entire Kaiser Daily Health Policy Report, search the archives, and sign up for email delivery at kaisernetwork.org/email . The Kaiser Daily Health Policy Report is published for kaisernetwork.org, a free service of The Henry J. Kaiser Family Foundation. © 2007 Advisory Board Company and Kaiser Family Foundation. All rights reserved.

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