As We Eliminate Life-Time Benefit Caps on Health Insurance, We Continue to Short Change Ourselves on Health Care

Thanks to a provision in the Patient Protection and Affordable Care Act, we’re living in the midst of one of the more significant changes in American health care – the elimination of life-time benefit caps on individual, health-insurance policies.

Between September 23, 2011 and September 23, 2012, the annual limit capped out at   $1.25 million. And between September 23, 2012 and January 1, 2014, the limit rises to $2 million. After January 1, 2014, caps will cease entirely.

The elimination of life-time benefit caps comes as a welcome change by those who are insured. But nothing is unalloyed. Consumers will encounter increases estimated at two to three percent to compensate health insurers for the costs that result from the caps elimination.

The end of caps on health benefits will have scant effect on many insured.  Comparatively speaking, few would have reached pre-2014 caps in their coverage. The real value of the elimination will be felt most people who require health care that’s extraordinarily expensive. They include people who suffer from chronic illnesses like hemophilia, cancer, HIV AIDS, diabetes rheumatoid arthritis, and heart disease. Costs to treat these conditions can sky rocket into the high six figures in a single year.

Some months ago, I wrote about Edward Burke, a resident of Palm Harbor, Florida, who was diagnosed with hemophilia at an early age in 1960 and suffers from Factor VIII deficiency. According to the National Hemophilia Foundation, about one in 5,000 males born in the United States has hemophilia. All races and economic groups are affected equally

Factor VIII created by drug companies early in the 1970s was a god send for Burke. This chemical takes the place of the blood factor that enables clotting in non-hemophiliac individuals but is lacking in people with hemophilia. Factor VIII has enabled Burke to lead a life that’s close to normal.

But Factor VIII doesn’t come cheap. This chemical costs nearly $1 million a year. At this rate in the past, he reached his lifetime health insurance caps in no time, and had to change employers and health plans frequently to renew his health coverage with new plans.

The unspoken social bias at work here is that we, as a society, should do whatever it takes to deliver the best of health care to whomever needs it, regardless of the cost. But this bias begs the question: Why must it cost such staggering sums to deliver health care to people who suffer from debilitating and life-threatening conditions? And this raises the ultimate dilemma that looms before us: How are we going to pay for our future health-care needs?

In the April 2011  paper titled “Health Care Spending in the United States and Selected OECD Countries, the Kaiser Foundation lays it out with abundant clarity:

“This issue is particularly acute in the United States, which not only spends much more per capita on health care, but also has one of the highest spending growth rates. Both public and private health expenditures are growing at rates which outpace comparable countries. Despite this higher level of spending, the United States does not achieve better outcomes on many important health measures.”

Clearly, we are not only spending more on health care than other countries In the bargain, we are short changing ourselves on health care and will continue to do so until we resolve this woeful situation.