Lifetime Caps Advocacy Day
This week BIAA participated in a day-long advocacy effort organized by the National Hemophilia Foundation in conjunction with the Raise the Caps Coalition in support of The Health Insurance Coverage Protection Act (HR 1085/S 442) sponsored by Representative Eshoo and by Senators Dorgan and Snowe. This bi-partisan measure which would set minimum lifetime limits on private health insurance at $10 million which would mitigate many of the challenges that people with high-cost chronic or catastrophic injuries or diseases face when procuring the medically necessary treatment that they need to live independent and productive lives.
As part of the effort, a briefing was held for the purpose of releasing a study conducted by Price Waterhouse Coopers (PwC) to examine the prevalence of lifetime limits, the number of people who are affected by them, and the costs of increasing, or removing, lifetime limits from health plans. The findings were based on public data, surveys of major insurers, and PwC actuarial modeling.
The findings of the study are as follows:
Prevalence of Lifetime Limits
- About 55% of individuals with employer provided health insurance are subject to lifetime limits, or 91 million people in 2009. The proportion of individuals with employer coverage, who have no lifetime limits increased substantially between 2000 and 2007.
- The most common lifetime limits are $1 million or $2 million. More than 20 percent of people, who are covered by employer plans, are subject to lifetime limits of $1 million; another 32% are subject to limits of $2 million or more.
- Employers that self-insure are more likely to have plans with lifetime limits.
- PwC estimates approximately 20,000 to 25,000 people in 2009 are no longer covered by their employer-sponsored plans because of lifetime limits.
Cost of Removing Lifetime Limits
-Increasing lifetime limits from $1 million to $5 million would increase premiums, on average, by 0.6 percent to 0.8 percent (approximately $3 per month for typical single plan, $8 per month for family plan).
-Increasing lifetime limits from $2 million to $5 million would increase premiums, on average, by 0.25 percent to 0.35 percent (less than $2 per month for typical single plan, $4 per month for family plan).
-Extending the limits from $5 million to $10 million would increase premiums on average by less than 0.1 percent.
Illustrative Impact of Lifetime Limits in 2019
- If lifetime limits are not increased, the number of individuals who are no longer covered by their employer-sponsored plans because of lifetime limits will increase exponentially as healthcare costs continue to rise.
- According to the U.S. Department of Health and Human Services, healthcare costs per capita are projected to rise at about 6 percent annually, or about 80 percent over next 10 years.
- At this rate of increase, PwC estimates approximately 300,000 people (0.3% of the people with lifetime limits) would be affected by lifetime limits in 2019 if current limits were not increased.
- Medicaid Savings from Increasing Lifetime Limits to $10 Million
- Many individuals who lose insurance coverage because of lifetime limits fall back on government programs, primarily Medicaid.
- If lifetime limits were increased to $10 million, PwC estimates that Medicaid programs would save more than $1 billion in 2010
As a part of the briefing, Majorie Crigler, the family member of a person that suffered a brain injury was on hand to express her family’s experience with lifetime caps. Her brother hit his lifetime cap about 5 months after suffering a brain injury and the family was forced to hire lawyers to navigate the process of applying for Medicaid. Her story was tremendously profound and helped the Congressional staff that attended the briefing better understand the importance of moving forward with this legislation.
After the briefing, BIAA and other stakeholders representing the Hemophilia community embarked on several meetings with Capitol Hill Staff to raise awareness for the legislation and also to highlight the findings of the PwC study.
