Changing What’s in the Fine Print
By Jay Angoff, Director of the Office of Consumer Information and Insurance Oversight
Imagine if you had health insurance and had paid your premiums for years, faithfully, and then you were diagnosed with cancer. You think, “thank goodness I have good insurance.” But then a few months into the treatment that you and your medical team agree is the best for you, you get a letter from your insurer that lets you know that they will no longer be paying, because you’ve hit an annual limit for spending. You think there must be a mistake.
You get on the phone and talk to person after person at the insurance company and are directed to fine print in your policy that sets not only an annual limit for spending, but contains a lifetime limit for spending. You’ve paid your premiums on time month after month, and now you have to decide whether to sell your house or take other drastic financial measures to continue your treatment.
The scenario outlined above may sound surreal, but it has been a reality for too many Americans facing costly medical conditions.
The Affordable Care Act starts to end this.
- Lifetime limits on most benefits are prohibited in any health plan or insurance policy issued or renewed on or after this Thursday, September 23, 2010.
- New rules are placed on annual limits, which will be phased out in 2014. Over the next few years, all group health insurance plans and individual health insurance plans issued after March 23, 2010 cannot set an annual dollar limit lower than the following:
- Plan or policy year running from September 23, 2010 to September 22, 2011: $750,000
- Plan or policy year running from September 23, 2011 to September 22, 2012: $1.25 million
- Plan or policy year running from September 23, 2010 to December 31, 2013: $2 million
You can find more details here, but what it boils down to is this: for too long, insurance companies have played games with the physical and financial well-being of Americans with costly medical conditions, and that is coming to an end. The common-sense provisions about lifetime and annual limits in the Affordable Care Act will reduce the number of Americans who find themselves in the terrifying scenario annual and lifetime dollar limits can create.