Human Resources News & Insights

HHS: Reform’s lifetime limits rule benefits 105M people

The Department of Health & Human Services recently released new data showing the impact of yet another portion of the healthcare reform law.

The HHS says the law’s ban on lifetime dollar limits on health coverage has eliminated coverage caps for 105 million Americans.

Before the law was passed, people with serious illnesses, like cancer, risked hitting their plans’ lifetime dollar limit, which set a maximum amount their insurance companies would pay for care.

Not every plan had lifetime limits, but the HHS says 105 million Americans were in a plan that did.

The HHS estimates that 70 million of those impacted were in a large employer plans, 25 million were in small employer plans and 10 million were in individually purchased plans.

Impact of other reform mandates

Earlier this month HHS said 54 million private health plan participants and 32.5 million Medicare participants had received at least one free preventive service as a result of the reform law’s new preventive coverage rules.

In December, the agency released data that said nearly 2.5 million young adults aged 19 to 15 had acquired medical insurance thanks to the healthcare reform law’s dependent coverage rule.

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  • Paul Benson SPHR

    OK, one more time, for the people who cannot understand “risk and cost sharing” – the primary rule of the whole insurance theory:

    1) There ARE NO FREE BENEFITS (preventative or otherwise) – everyone’s rates increase to PAY FOR IT ! As HR professionals, we have to be more analytic and critical of the HHS “talking points” and not fall victim to the “party line” that the current administration is pushing. Every time someone parrots the “free benefits” version, they need to be challenged with the actuarial facts !!

    2) The vast majority of “young adults” (the article said ” aged 19 to 15 ” – I’m pretty sure they meant to say aged 19 to 26) being generally healthier than the rest of the population – could buy insurance on the open market, or through their employers at a cheaper price than ADDING THEM to their Parent’s insurance plan. Again, see #1 above.

    3) Since 99.9 % of the population will NEVER use more than the commonly existing number of 1 million in benefits, the “lifetime cap removal” does not really BENEFIT the 105 million people as claimed. It may “potentially benefit” a small number of users, but since most existing policies have a 1 mill lifetime max, this is of no real benefit to most people. HOWEVER it will result in additional premiums since the Mandate now creates a greater “potential loss” for the Carriers (and employers).

    So, throwing out a big number of “people benefitted” is great for headlines, but intellectually dishonest. Granted, this article does make it clear that this is only the HHS view, not the authors.

    We as HR professionals, need to “throw down” the penalty flag whenever we see this happening!

    Just my humble opinion!

  • MMAN

    @Paul Benson SPHR…you are correct, preventative care is not free…but it has already been paid for, well for those of us who have private health insurance through the premiums that the employer and employee pays. All copays do is require those who go to the Dr. to pay for it twice. The insurance companies pay nothing for a Dr.’s visit. You see, that’s the way these greedy insurance companies work, they want your money but they do not want to pay out for their insureds health needs.

    You also say that “it will result in additional premiums since the Mandate now creates a greater “potential loss” for the Carriers (and employers)”. But the way the insurance industry was before created a greater “potential loss” for employees having to pay once more through copays and in the event that one reaches the lifetime maximum (God forbid) giving the insurance companies a way out of providing what they charge their members for (not fair). Sorry, it sounds like you are sympathetic to the big insurance companies.

  • Common Sense

    Let’s get a few things straight. It has been said that “The insurance companies pay nothing for a Dr.’s visit.” This is flat out wrong. A typical doctor visit can cost around $70 to $100 even after an insurance discount. A typical copay is $20 or so dollars. How is the insurance carrier not paying anything for the visit? (Let’s not forget that the premium goes towards far more than paying for doctor visits). The co-pay is essential in preventing abuse and overuse. If all doctor visits become “free”, insureds would have no incentive to make wise choices. Everybody should put some skin in the game at each step.
    Sorry MMAN, It does not sound so much like Paul is sympathetic to big insurance companies as much as it sounds like he has a reasonable analytic argument that the HHS is being “intellectually dishonest”. You on the other hand seem to be demonizing insurance companies as greedy.
    Health Care insurance companies consistently have margins of 6% and under. This is less than most industries. Large internet/tech firms average over 13%. Are they also “greedy”?
    I would also like to address the HHS comments on preventative care. Can we once again please put an end to the ongoing fallacy that preventative care saves money in the long run.

    Reform proponents repeat this like a mantra. Because it seems so intuitive, it has become conventional wisdom. But like most conventional wisdom, it is wrong. Overall, preventive care increases medical costs.
    This inconvenient truth comes, once again, from the CBO. In an Aug. 7 letter to Rep. Nathan Deal, CBO Director Doug Elmendorf writes: “Researchers who have examined the effects of preventive care generally find that the added costs of widespread use of preventive services tend to exceed the savings from averted illness.”
    How can that be? If you prevent somebody from getting a heart attack, aren’t you necessarily saving money? The fallacy here is confusing the individual with society. For the individual, catching something early generally reduces later spending for that condition. But, explains Elmendorf, we don’t know in advance which patients are going to develop costly illnesses. To avert one case, “it is usually necessary to provide preventive care to many patients, most of whom would not have suffered that illness anyway.” And this costs society money that would not have been spent otherwise.
    Think of it this way. Assume that a screening test for disease X costs $500 and finding it early averts $10,000 of costly treatment at a later stage. Are you saving money? Well, if one in 10 of those who are screened tests positive, society is saving $5,000. But if only one in 100 would get that disease, society is shelling out $40,000 more than it would without the preventive care.
    Charles Krauthammer

  • MMAN

    @Common Sense…you have stated that a Dr.’s visit costs anywhere from $70 to $100 (that in itself is ridiculous but a totally different argument) while this may be true, most insurance companies have negotiated with providers to accept close to half this much. For example, under my medical plan, my copay is $X for a routine office visit. The cost that my insurance provider has negotiated with my physician’s practice since they are in-network is somewhere around that, I actually think a little less. Therefore, my $X copay covers the cost of the visit leaving my insurance company owing nothing. Most major insurance is like this. So how do you get that the insurance companies pay for office visits?

  • Common Sense

    @MMAN Thank you for your purely anectdotal evidence. The fact is you were making an inaccurate blanket statement that the “greedy” insurance companies do not pay anything for doctor visits.

    I don’t know where you reside, but I live in Chicagoland. I just checked my son’s last e.o.b. for a doctor visit in February. The doctor charged $193 for the visit. The insurance was able to get an $83 reduction. That left $110 remaining, even with a $30 copay the insurance was on the hook for $80.

    I am not saying there may be occassions like yours where the insurance ends up not having to pay anything for a visit. I am simply saying it is no way a universally true statement like you implied. (not even close) .

    Let’s remember, the greedy insurance companies are not frocing you to buy coverage with doctor visits covered with a copay. You can opt for no copays or even no coverage for doctor visits. If you want a zero copay find a company that will offer it. Be warned however, it will be reflected in your premiums.

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