Low health insurance caps leave patients stranded
Mary Wusterbarth thought her toddler was struggling with an ear infection when she seemed sluggish. Instead, a virus had attacked the little girl’s heart, damaging it beyond repair. Brea needed a transplant.
Within three weeks of a 2007 doctor visit, the 20-month-old had exhausted the $1 million lifetime maximum on her health insurance. Her parents have scrambled ever since for ways to cover thousands of dollars in monthly medical costs.
“We have no idea what kind of financial future we have,” said Wusterbarth, of Wake Forest, N.C. “The medical bills come almost daily. There’s never an end.”
Insurers set lifetime limits to keep rates low on some policies, but holders are learning that individual caps that seemed large quickly max out as health care costs soar. Several patient advocacy groups are prodding insurers to raise the caps, which generally don’t adjust for inflation. Congress also is considering two bills that would do that.
Insurers, however, say most health coverage already offers either a comfortable maximum of several million dollars or unlimited coverage. They note that more government regulation could lead to higher coverage costs, and low lifetime caps help them offer a greater variety of coverages.
“I think the discussion needs to move into why do some health care services cost hundreds of thousands of dollars and what can we do to address those issues,” said Robert Zirkelbach of America’s Health Insurance Plans, a trade association representing nearly 1,300 insurers.
The family had no idea how fast costs were piling up. Some initial bills didn’t arrive until months after treatment started. Then they would receive multiple mailings for each treatment, each listing a different amount the hospital cost, the insurance discount, the amount they owed.
“When you’re dealing with constant care of your child, you’re not going home with a calculator and adding up to see where you’re at,” Kelly Treinen said.
“You can eat through a million-dollar lifetime cap in two or three surgeries,” he said.
Low lifetime maximums are found more often in small-employer group plans, Flanagan said, noting that those businesses generally have less insurance buying power. He said employers often give their workers a choice on plans or premiums but not on lifetime maximums.
The Kaiser Family Foundation study says a greater percentage of employer-offered group plans are providing lifetime caps of at least $2 million, and the percentage that offers caps below $2 million has declined slightly.
But medical costs for employer-sponsored health plans should increase 9.9 and 9.6 percent this year and next, according to PricewaterhouseCoopers Health Research Institute.
“The nature of caps is that over time it becomes easier and easier to hit (them) because the cost of health care services keeps going up,” said Mike Thompson, a health care and employee benefits expert with the firm.
His foundation renewed a lobbying push in Congress this year for higher lifetime caps because it sees a better political climate for one.
U.S. Rep. Anna Eshoo, D-Calif., unsuccessfully pitched a bill on lifetime caps in 1996. She will try again this summer because she sees better odds with a Democrat majority in the House of Representatives. Sen. Byron Dorgan, D-N.D., introduced a similar bill in March in the Senate.
Mary Wusterbarth, a stay-at-home mother with two other children, thinks legislation on minimum lifetime caps is an excellent idea. Her daughter, Brea, is 3 now and doing well. But family finances aren’t as healthy.
She qualified for Medicaid while hospitalized for the transplant, but that coverage ended once she was released. The family has since moved to North Carolina, where Brea’s father, Danny, works as an operations manager for a distribution center.
But Danny Wusterbarth makes too much money for Brea to receive Medicaid coverage. Insurers won’t cover Brea because of the medical history, a common problem with people who reach caps.
“We were actually told that if we would get a divorce or if he would quit his job, then she could get all the help she needed,” Wusterbarth said. “But that’s not the way we do things, so we just take it day by day.”
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