About Limits

NEWS ABOUT LIFETIME LIMITS

David Linney

Health insurance lifetime limits have been a longtime concern for the National Hemophilia Foundation and the many consumers with bleeding disorders NHF serves that use factor products on a regular basis. The reason for concern is high factor product costs can “use up” a lifetime limit in a hurry and leave a consumer with no insurance coverage.

The focus on lifetime limits has primarily been with group health insurance. That’s because Medicare and Medicaid have no lifetime limits and less than one in ten persons with commercial health insurance have an individual plan versus a group plan. (Per Kaiser Family Foundation data for the non-elderly, approximately 160 million are covered by group health insurance and only 13 million by individual health insurance.)

Many consumers are under the impression that the majority of group health insurance plans have a lifetime limit of one million dollars. While there are plans with a one million dollar limit, these plans are clearly in the minority as evidence by the Kaiser Family Foundation report that follows. Over the years, the amount of lifetime limits has trended upward.

The Kaiser Family Foundation and Health Research and Educational Trust/ Employer Health Benefits 2004 Annual Survey (page 109) reports important summary information about the status of lifetime limits. (The information from the original table has been reformatted.)

Distribution of Covered Workers with Maximum Lifetime Benefit, by Plan Type and Firm Size, 2004

Small Firms: 3- 199 employees

Large Firms: 200 or more employees

	$1,000,000 or Less	$1,000,000- $1,999,999	$2,000,000 or more	No Limit
1 Conventional Plans
- Small	13%	22%	19%	46%
- Large	1%	23%	43%	33%

2. HMO Plans
- Small	1%	7%	7%	85%
- Large	<1%	11%	18%	71%

3. PPO Plans
- Small	1%	24%	26%	48%
- Large	1%	36%	32%	30%

4. POS Plans
- Small	1%	16%	17%	66%
- Large	2%	24%	14%	60%

Summary All Plans
- All Small Firms	2%	19%	19%	60%
- All Large Firms	1%	27%	27%	45%

Summary of All Small & Large Firms	1%	24%	25%	49%

Commentary & Analysis

· Per summary data of all large and small employer plans in the Kaiser Family Foundation Report, there is good news about lifetime limits for the bleeding disorders community:

- 49% of plans have no lifetime limit.

- 25% of plans have a lifetime limit of 2 million dollars or more.

- Only 1% of plans have a lifetime limit of one million dollars or less.

· The not so good news from the Report is that there are 24% of employer plans with a lifetime limit between one and two million dollars. Because of higher factor product costs in recent years (due to product price increases and prophylaxis), a two million dollar limit today may be the one million dollar limit of a number of years ago.

· What does this data from the Kaiser Family Foundation Report mean for the bleeding disorders community?

- This report documents that the overall amount of lifetime limits for employer plans is higher than expected. This is good.

- While any employer plan with a lifetime limit that is not unlimited may be problematic, the plans with a limit of two million or less are probably the plans that would be of the most concern.

- The next question is who in the bleeding disorders community would be affected by a lower lifetime limit? Certainly not all patients. Patients with mild hemophilia are almost never affected and patients with moderate hemophilia and severe von Willebrand’s disease are only rarely affected. The patients affected are almost always those with severe hemophilia.

- If we extrapolate numbers from CDC data, 52% or 9,360 patients have severe hemophilia out of a total hemophilia population of 18,000. 48% or 4,493 patients with severe hemophilia have commercial insurance. Of the 4,493 patients, 1,078 would be projected to have a lifetime limit between one and two million dollars and 45 would be projected to have a lifetime limit of one million or less. So a little over eleven hundred patients with severe hemophilia and employer insurance may have a lower lifetime limit.

In consideration of overall individuals affected by lower lifetime limits, another approximately 500 patients with severe hemophilia that have an individual health plan (state high risk plan or other) would need to be added to the total, as individual plans commonly have a lower lifetime limit. In addition, a few individuals with a diagnosis other than severe hemophilia should be added. So a good number to use to project individuals nationally that have a lower lifetime limit is 1700- 1800.

- This number will need to be lowered even more (probably by a couple of hundred), because there has been an increase in coverage of factor products in the marketplace through drug plans, which commonly do not have a lifetime limit.

(While it is still more common to have factor products covered as a medical benefit through health plans, there is a trend change to covering factor products as a pharmacy benefit through drug plans. If this trend continues, there will be even more plans covering factor product with no lifetime limit.)

- If 1500 individuals from the bleeding disorders community have a lower lifetime, how many actually use up or are very close to using up their lifetime limit each year? A good estimate may be between one hundred and two hundred.

In making this projection, the following was considered:

§ Everyone with a lower lifetime limit will not be affected, because enough expenses must be incurred to threaten a lifetime limit and that usually takes at least a few years.

§ Persons with individual plans may be impacted harder if their individual plan is their only insurance alternative.

§ Individuals with employer insurance may get a new lifetime limit in some instances if the employer changes insurance plans or offers more than one insurance plan. Individuals will get a new lifetime limit when they change employment.

· In summary, new information about lifetime limits is important for consumers to monitor for purposes of personal insurance benefit planning and the development of advocacy policy for the bleeding disorders community.