Health insurance is supposed to be a fair bargain. We pay premiums when we are well so that if we get sick most of the costs will be taken care of.
It’s the deal that lets people predict their costs from month to month and make big decisions about borrowing to buy a house, or saving for college and retirement. But for many Mainers it is a deal that has the potential to work only one way.
While there is no limit to how long the customer can pay his monthly premium, more than half the health insurance plans sold in Maine cap lifetime benefits. So, the security that comes with buying insurance for years can be wiped away in a matter of weeks with a catastrophic illness, and investments and savings can also disappear.
This is an unfair situation and one that puts health care consumers at an unnecessary risk. L.D. 1620, a bill sponsored by state Rep. Seth Berry, D-Bowdoinham, with significant support from Republicans would make insurers live up to their part of the bargain and should be the law in Maine.
Fortunately, very few Mainers ever actually exceed their lifetime caps. According to a study done by the Maine Bureau of Insurance, there were only 14 cases of people who exceeded their lifetime benefit caps in the last 10 years. But the threat is there for everyone who has a capped policy, and it is real. And that hangs over all of them.
Insurance companies argue that they need to caps to control costs, and that is something that they should be doing. During the last decade, insurance premiums for Maine’s workers rose 4.6 percent more quickly than median wages in the state. Keeping up with the cost of health care is a constant struggle for employers and individuals and the source of a national crisis.
But capping benefits does not reduce health care costs, it just shifts them from profit-making insurance companies onto some of the people who are least able to afford it, including those with catastrophic and chronic illnesses, who can see the cost of care quickly outpace their ability to pay the bills once a cap has been hit. There are ways to control health care costs that would not be as traumatic for the few families who get cut off when they need it most.
COSTS MOUNT QUICKLY
Theresa D’Andrea of Limerick told the Legislature how quickly her family bumped up against its $250,000 lifetime limit when her husband discovered that a freckle on his foot was really skin cancer.
After a month-long hospital stay and treatment with an experimental drug that cost $9,000 a dose four times a week, they were delivered a $1.6 million bill.
”It was by the simple grace of people being kind that we still have a roof over our head and food to eat,” D’Andrea testified. ”But the insurance company we had been paying regularly, month after month – made no effort to help us.”
A NATIONAL PROBLEM
These caps are not just a problem for Mainers. All the health care reform bills that circulated through Congress last year made some effort to address them, and a bipartisan stand-alone bill sponsored by Sens. Byron Dorgan of North Dakota and Olympia Snowe of Maine would have outlawed caps below $10 million.
”Overly restrictive lifetime caps on benefits can cause everyday Americans to go bankrupt and ultimately shift their health care costs to public programs such as Medicaid,” Snowe said when her bill was introduced.
This is one area in which Maine should not wait for relief from Washington. There is no way to know when the national ban would go into effect or gridlock on health care reform legislation could mean further exposure for Maine families at a time when costs are increasing rapidly.
But there is some good news here. Even though the number of people who are at risk is large, very few actually exceed their caps, making this an affordable reform.
According to the Bureau of Insurance study, the additional cost would be less than 1 percent.
Banning caps would protect the small number of people with extremely high health costs, while providing security for all health insurance consumers who will know that their insurance will be there even if they get sick.
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