How to tell if your medical insurance has a lifetime cap?

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nisiprius
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How to tell if your medical insurance has a lifetime cap?

Postby nisiprius » Sat Dec 29, 2007 2:00 pm

By a "lifetime cap," I mean some maximum on the grand total of accumulated claims you incur during a lifetime.

I don't think insurance has one, but, you know how it is particularly when it comes to medical insurance... what you think you see isn't always what you get. In a recent conversation with someone who lives in another state they expressed skepticism, saying that almost all medical insurance does have such caps.

I've looked through the 93-page "this is your comprehensive plan description" book with a fine-toothed comb, and I didn't see one, and I called the insurance company, and they said it doesn't.

One thing that occurs to me is that if your insurance has such a cap, I'd think they'd send you an annual statement saying what your lifetime total is to date.

Does anyone have health insurance with a lifetime benefits limit and, if so, do you get such a statement?
Annual income twenty pounds, annual expenditure nineteen nineteen and six, result happiness; Annual income twenty pounds, annual expenditure twenty pounds ought and six, result misery.

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Christine_NM
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Postby Christine_NM » Sat Dec 29, 2007 2:16 pm

At my workplace the dollar cap only applied to Medigap policies. It was $150,000 a decade ago, don't know what it is now but will find out when I turn 65 this year.

Regular employee medical insurance had no cap.

Of course the whole problem with medical insurance is that the rules are different for everyone, depending on your employer and any other insurance you may buy. So YMMV.

I may find it necessary to try to buy an additional Medigap policy.

Levett
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Postby Levett » Sat Dec 29, 2007 2:50 pm

Interesting question. Since I'm 65 the HR website reads this way (I assume there's no cap on Medicare): basic benefits (backs Medicare as supplementary insurance) no cap; master medical, services as defined by Blue Cross/Blue Shield, $1 million cap. No cap on prescriptions (we are exempted from Medicare Part D because of employer's superior coverage).

I used to receive annual statements re medical insurance coverage, but no longer receive them. I do have to go through annual re-enrollment because my former employer makes insurance providers bid each year. Choose the low bidder, you pay no premium. Choose the higher bidder, you pay a premium. Bob U.

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nisiprius
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Postby nisiprius » Sat Dec 29, 2007 3:49 pm

bob u. wrote:Interesting question. Since I'm 65 the HR website reads this way (I assume there's no cap on Medicare): basic benefits (backs Medicare as supplementary insurance) no cap; master medical, services as defined by Blue Cross/Blue Shield, $1 million cap.

So, the fact that there is a cap is quite clear to anyone who's looking for it. Is is clear whether that's an annual cap (bad) or a lifetime cap (worse?)
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daryll40
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Postby daryll40 » Sat Dec 29, 2007 4:44 pm

Our UnitedHealthScare policy (thru wife's work) has a $1M PER FAMILY lifetime cap. It "scares" me quite a bit. That being said I tried to find some sort of supplemental "umbrella" policy but it does not exist. So for the time being I have to live with this risk.

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soaring
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Every medical policy I've ever had..there was a maximum

Postby soaring » Sat Dec 29, 2007 5:17 pm

total payout by the insurance company. Currently it is 6 million and the previous was 2 million. Both were with BCBS. Previously to that there were maximum payouts but I don't remember what they were. Call your insurance company and ask.

Early in the literature of all my policies were the statements regarding maximums.

gene

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nisiprius
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Postby nisiprius » Sat Dec 29, 2007 5:57 pm

daryll40 wrote:Our UnitedHealthScare policy (thru wife's work) has a $1M PER FAMILY lifetime cap. It "scares" me quite a bit. That being said I tried to find some sort of supplemental "umbrella" policy but it does not exist. So for the time being I have to live with this risk.

1) But the cap is made perfectly clear, right? Even on the single-page summary sheets about your coverage?
2) Do they tell you every year what your family lifetime total is?
Annual income twenty pounds, annual expenditure nineteen nineteen and six, result happiness; Annual income twenty pounds, annual expenditure twenty pounds ought and six, result misery.

likegarden
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after 65

Postby likegarden » Sat Dec 29, 2007 5:59 pm

Insurance coverage changes significantly when over 65 (I am 68). Now you are covered by Medicare, additionally pay for Medicare B too. No dental. Vision and drugs via former employer. I have an additional BCBS Senior Blue policy which is an HMO. I like that because of no hassles with bills.

My former employer, a large US conglomerate makes available to retirees and spouses the Senior Blue HMO without lifetime limit (I read the manual plus asked), a standard insurance by the employer ($100K only lifetime) and an insurance from an employee organization ($300K lifetime limit). It is important to read all the details.

We mainly talk here about AA, return on investments, etc. but the future medical payments can wreck any good plan when health insurance is mediocre. Health and long term care insurance is so important to protect finances in retirement. (And there was an insurance salesman posting here recently only about life insurance.)

Bernd

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mephistophles
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CAPS

Postby mephistophles » Sat Dec 29, 2007 6:06 pm

Insurance caps are spefically defined in your plan. Go to your plan administrator and ask for this information. They have to provide it to you.


meph

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nisiprius
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Re: Every medical policy I've ever had..there was a maximum

Postby nisiprius » Sat Dec 29, 2007 6:08 pm

soaring wrote:Call your insurance company and ask.

I did. I understood them to say that there is no cap. But it wouldn't be the first time I misunderstood a representative's verbal answer... or the first time that a representative misunderstood my question. There was a hellacious time when I kept calling BCBS and the representative I spoke to said, every time, flatly, "Yes, that procedure is covered under your policy," but the doctor's business office says "I'm sorry you're getting incorrect information, but the people we talk to at BCBS told us that that procedure is not covered under your policy..."

So my question really is: to people who have a cap, is that made perfectly clear in your plan literature to anyone who reads it diligently?
Annual income twenty pounds, annual expenditure nineteen nineteen and six, result happiness; Annual income twenty pounds, annual expenditure twenty pounds ought and six, result misery.

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Postby prh2s » Sat Dec 29, 2007 6:18 pm

nisiprius wrote: So my question really is: to people who have a cap, is that made perfectly clear in your plan literature to anyone who reads it diligently?


Caps are indeed usually spelled out on the summary of benefits page, as well as in the policy. It shouldn't be hard to find the cap if there is one.

My wife's policy (Anthem) has no cap, and says so explicitly. My current policy (Aetna) states very clearly that there is a $1M-per-condition lifetime cap.

Patrick

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soaring
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Postby soaring » Sat Dec 29, 2007 7:20 pm

Yes my policy clearly stated the lifetime maximum on each policy I've ever had.

Levett
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Postby Levett » Sat Dec 29, 2007 7:47 pm

Let me see if I can offer up some language from a publication I, as a university retiree, receive several times a year, including the continuing annual open enrollment period since my former employer insists on bids from at least two current providers.

Now, as one who is 65 who has Medicare A & B, when I see the word "insurance" (meaning health insurance) I need to know what procedures Medicare covers (no cap), what my "basic benefits," acting as supplementary to Medicare, cover (no caps), and what--standing last in line--my catastrophic covers (lifetime cap of $1M currently).

Here's a sample of language (rather than give you the tome I received) from the periodic newsletter all retirees receive. http://www.hr.msu.edu/NR/rdonlyres/0D66 ... Source.pdf Scroll down to summary of health plan provisions for retirees. The link also spells out services provided under "basic benefits" as well as "master medical." Hope this is a helpful example.

It has been my unfortunate experience to witness first-hand with extended family members (3) and friends (have lost count)--some still alive, others dead--very costly medical procedures at major medical centers, some of these procedures considered "experimental." In no instance has the person's procedure not been covered by the combined insurances. This is not said to dismiss the importance of Nisiprius's concern. This is just to report what I have seen locally with my own eyes.

I do note with great interest that the cap on catastrophic is at least five times higher for those under 65 through my employer. I assume this has something to do with Medicare taking over @ 65. Bob U.

P.S. I'm all ears to other views of this important discussion and would welcome input from experienced insurance people like Ole Meph.

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nisiprius
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Postby nisiprius » Sat Dec 29, 2007 9:08 pm

bob u. wrote:Here's a sample of language (rather than give you the tome I received) from the periodic newsletter all retirees receive. http://www.hr.msu.edu/NR/rdonlyres/0D66 ... Source.pdf Scroll down to summary of health plan provisions for retirees. The link also spells out services provided under "basic benefits" as well as "master medical." Hope this is a helpful example.

Yes, perfect, and it is very helpful. And thanks to others who have responded.

The phrase "a lifetime maximum of $1,000,000" leaps right out at me once I start looking for it. (And "a lifetime maximum of $5,000,000" in the description of the next plan). And that is indeed the basic benefits summary.

There's no way I'd have overlooked that if my plan had similar language presented in a similar way.

My main concern was that the material I have doesn't mention any cap, but doesn't say there isn't one, and, you know, absence of evidence isn't evidence of absence...
It has been my unfortunate experience to witness first-hand with extended family members (3) and friends (have lost count)--some still alive, others dead--very costly medical procedures at major medical centers, some of these procedures considered "experimental." In no instance has the person's procedure not been covered by the combined insurances. This is not said to dismiss the importance of Nisiprius's concern. This is just to report what I have seen locally with my own eyes.

That's a useful observation, too. Thanks.

Right now, I'm limited to the plan my employer offers, which seems to be a very good one. Next year, when I semiretire at 62, I'll need to assemble a patchwork of COBRA and HIPAA to get me through the next three years and there will be choices to make, and I want to be primed for reading fine print. I couldn't care less whether I get nickeled and dimed on copays or whether the plan will get me a discount at a fitness center, but I want to be darned sure I understand what it will do if a catastrophe happens.
Annual income twenty pounds, annual expenditure nineteen nineteen and six, result happiness; Annual income twenty pounds, annual expenditure twenty pounds ought and six, result misery.

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daryll40
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Postby daryll40 » Sat Dec 29, 2007 9:31 pm

nisiprius wrote:
daryll40 wrote:Our UnitedHealthScare policy (thru wife's work) has a $1M PER FAMILY lifetime cap. It "scares" me quite a bit. That being said I tried to find some sort of supplemental "umbrella" policy but it does not exist. So for the time being I have to live with this risk.

1) But the cap is made perfectly clear, right? Even on the single-page summary sheets about your coverage?
2) Do they tell you every year what your family lifetime total is?



1. Right.
2. Yes.

stjoe56
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Postby stjoe56 » Sat Dec 29, 2007 10:10 pm

There can be all sorts of different caps. For example, if you get an organ transplant in Reno, there is no cap via Blue Shield/Blue Cross. However if your organ transplant cannot be done locally and they send you to UC Davis, there is a $500,000 cap on expenses.

SJ

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Postby lippy » Sat Dec 29, 2007 11:02 pm

For my employer it is stated in the Healthcare Plan Options Summary (handout), clearly stated:
Lifetime Benefit Maximum Per Person: $1,000,000.

and in the Summary Plan Description:
Maximum Benefit Per Covered Person While Covered Under This Plan: $1,000.000.

We are changing on January 1 from CoreSource to Cigna. The value hasn’t changed. One of my fellow employees brought this topic up in a call-in with HR, before the transition, wanting to know if this was a realistic number in today’s times. HR stated that no employee (~1000) had even come close. When the employee pushed the matter, they said something about stop-gap catastrophic insurance that would kick in…but I don’t remember the details about that, and can’t find it in any of the documentation.

For us: NO the balance is not on any EOB or annual statement. HR said they could supply us with the number if we called them.

Regards,
Lippy

stjoe56
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Postby stjoe56 » Sat Dec 29, 2007 11:13 pm

lippy wrote:HR stated that no employee (~1000) had even come close.


Bullhocky. A transplant with complications can easily cost that much. The insurance person who told me about the $500,000 limit on out of service hospitals, said the transplant in question cost $1.5 million.


SJ

lippy
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Postby lippy » Sun Dec 30, 2007 11:20 am

A transplant with complications can easily cost that much...


I tried to avoid my cynical side when I wrote the above post…because former employees who I know had transplants and high procedure bills are no longer working for us; they have been let go based on “cut-backs”. So perhaps HR is correct: no (current) employee…(my emphases)…is approaching that value…

Regards,
Lippy

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Postby FinanceGeek » Sun Dec 30, 2007 2:57 pm

Every policy I've ever been covered by has had a lifetime maximum, they have ranged from $1m to $5m. The only situation in which I've heard of anybody coming close to such limits is in the case of very premature babies (e.g. 23 weeks) who were in the hospital for several months.

For what its worth I don't worry very much about eating up this lifetime limit gradually - it seems that every couple of years my employment changes (or my employer changes insurance carriers), either event resets the counters.

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Postby nisiprius » Sun Dec 30, 2007 6:09 pm

FinanceGeek wrote:Every policy I've ever been covered by has had a lifetime maximum, they have ranged from $1m to $5m. The only situation in which I've heard of anybody coming close to such limits is in the case of very premature babies (e.g. 23 weeks) who were in the hospital for several months.

What about burns, which can happen to anyone (e.g. in a car accident?) I don't even like to think about this stuff, but I have the impression that a bad burn can involve many months of treatment in a specialized burn center, with expensive equipment (air-suspension beds) and pretty intensive nursing attention, and multiple plastic surgeries. Who knows what that costs; I'd assume $2000 a day would be conservative. I'd think you could easily make a big dent in a million dollars.

Let's put it another way. Why would insurance companies impose lifetime caps if it didn't think it would save them money... which implies that people actually do reach them.
Annual income twenty pounds, annual expenditure nineteen nineteen and six, result happiness; Annual income twenty pounds, annual expenditure twenty pounds ought and six, result misery.

Levett
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Postby Levett » Sun Dec 30, 2007 7:28 pm

Nisiprius--

I just came across this link. http://uclue.com/?xq=1171

Obviously, your initial concern is very much an open question, even among actuaries! Bob U.

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Postby FinanceGeek » Sun Dec 30, 2007 8:03 pm

The place where I really see lifetime limits mattering the most is in the state run high risk insurance pool plans. Those customers are those with the most chronic (read: expensive) conditions and are unable to buy insurance anywhere else.

Many states set the lifetime limit of these policies at $1m. It might be possible to query the various states' insurance regulators to get a sense of how many people have exceeded these limits.


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