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July 1997 |
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July 1997 |
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Lifting the Lifetime Cap on Insurance
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Eshoo, Jeffords, & Rockefeller Introduce Bipartisan Legislation To Lift Lifetime Cap on Health Insurance Payments
June 5, 1997
Washington, D.C.--Rep. Anna Eshoo (D-CA), Sen. James Jeffords R-VT), and Sen. Jay Rockefeller (D-WV) today introduced legislation in Congress to raise the individual cap on lifetime health insurance payments to $10,000,000 for group insurance coverage. Eshoo is a member of the House Commerce Committee, while Jeffords chairs the Senate Labor and Human Resources Committee, both of which have jurisdiction over the legislation. In the 104th Congress, Jeffords authored similar legislation which Eshoo introduced in the House.
"The current standard lifetime cap is like a dinosaur from `Jurassic Park'--a relic from another age that can still be hazardous to those who get in its way," said Eshoo. "A million dollar cap was fine when it was established in the early 1970s. But inflation has sent medical costs skyrocketing and forced thousands of Americans to bump up against that payment ceiling. As a result, some patients who desperately require medical attention are plowing through their savings and ending up on public assistance just to pay their doctor bills. Since anyone can be hit at any time with a disabling disease or traumatic injury--resulting from everything from AIDS to car accidents--this initiative will benefit a wide range of people."
The legislation would amend the Employee Retirement Income Security Act and the Public Health Service Act to raise the lifetime cap from the typical existing limit of $1 million to $5 million in 1998 and $10 million in 2002. It would exclude employers with fewer than twenty workers. Over 150 national health-related nonpartisan groups have endorsed the measure.
At present, approximately one quarter of employer-sponsored health plans have no lifetime limit. Unfortunately, many people don't realize that their health insurance policies have a lifetime cap that could be easily exceeded if a catastrophic illness or injury occurred. If the industry standard of a $1 million cap were indexed for medical inflation since 1970, it would be worth between $10 million and $15 million today. The American Academy of Actuaries found that raising the lifetime cap on large employers would likely require a premium increase of only $7 per year per adult to cover claims between $500,000 and $1 million.
According to the accounting firm of Price Waterhouse, 1,500 people exhaust their lifetime payments under their private health insurance each year and have no choice but to impoverish themselves and their families to qualified for Medicaid. The firm estimates that an additional 10,000 people will reach their lifetime payment limits in the next five years. Lifetime caps are particularly devastating to those who become seriously ill, disabled, or injured at an early age. Some children born with certain cancers or hemophilia reach their lifetime cap by the time they are ten years old.
Raising the payment cap will not only provide more payments for patients, but also save money for the federal government. Price Waterhouse estimates that raising the caps would save approximately $7 billion for the Medicaid program over seven years because people would not be forced to turn to the federal government as the healthcare provider of last resort.
Present at a Press Conference in Washington last week introducing the legislation were Jim Brady, Mary Brady, and Christopher Reeves.
Contact: Lewis Roth
(202) 225-8104
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