Senate health care bill would allow insurers to limit coverage for seriously ill patients

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Health care loophole would allow coverage limits

WASHINGTON — In a victory for people with cancer and other serious medical problems, the White House agreed Friday to help close a loophole in the Senate health care bill allowing annual dollar limits on their care.

“The president has made it clear that health insurance reform legislation should prevent insurance companies from placing annual limits on health expenditures that can force families into financial ruin,” said White House spokesman Reid Cherlin. “We will continue to work with Congress on this policy.”

“The bottom line is they are going to try to improve the Senate bill,” said Stephen Finan, a policy expert with the American Cancer Society Cancer Action Network, which first called attention to the problem.

Tucked in a clause of the Senate bill captioned “No lifetime or annual limits” is a provision that would in fact permit such caps.

As currently written, the Democratic bill would allow insurance companies to place annual limits on the dollar value of medical care, as long as the limits are not “unreasonable.” The legislation does not define what level of limits would be allowable, delegating that task to administration officials.

Proponents said such limits are necessary to prevent premiums from going up overall.

Finan said that White House health reform director Nancy Ann DeParle agreed in a call Friday afternoon with cancer society officials to work to change the Senate language. The idea would be to first narrow the range of limits that could be imposed, and then gradually phase them out altogether over several years. Senior Senate and House staffers also took part in the call.

“The primary purpose of insurance is to protect people against catastrophic loss,” said Finan. “If you put a limit on benefits, by definition it’s going to affect people who are dealing with catastrophic loss.”

The 2,074-page Senate bill would carry out Obama’s plan to revamp the health care system, expanding coverage to millions now uninsured and trying to slow budget-busting cost increases. A tentative deal among Democrats to back away from creating a new government program to compete with private insurers appears to have overcome a major obstacle to passage.

Under both the Senate and House health care bills, most of the expansion of health insurance coverage won’t take place until three to four years after enactment. Democrats have touted a series of consumer protections as immediate benefits Americans will secure through the legislation.

In the Senate, two key committes disagreed over how to handle annual limits.

The legislation that originally passed the Senate health committee last summer would have banned dollar limits on medical coverage, but a second panel — the Finance Committee — took another approach. Finance Chairman Max Baucus, D-Mont., and others feared that an outright ban could drive insurance premiums higher for everyone, and sought to strike a balance.

A spokesman for Senate Majority Leader Harry Reid, D-Nev., said that banning all limits could have have unintended consequences, leading to higher costs. “We continue to work with experts on how best to accomplish our goals of preventing insurance companies from imposing arbitrary coverage limits while providing the premium relief American families need and deserve,” said Jim Manley.

Finan said the language in the Senate bill essentially invalidates the legislation’s ban on lifetime coverage limits.

“If you can have annual limits, saying there’s no lifetime limits becomes meaningless,” he said. The cost of cancer treatment can exceed $100,000 a year. A patient battling aggressive disease in its later stages could exhaust insurance benefits.

“If you are a cancer patient you could be faced with a situation where you either have to terminate your care, or face a financial catastrophe,” said Finan. “We see this kind of situation with some regularity.”

It’s unclear how widespread such limits are in the current insurance marketplace. Large employers have moved away from limits, but insurers have wide discretion in designing plans for small businesses and individual customers.

In the House bill, neither annual nor lifetime limits would be allowable under an essential benefits package intended to provide comprehensive coverage by plans sold in a new insurance marketplace. Insurers would be required to gradually phase out annual limits in other plans they offer.