Health Care Reform Should Not Include a Lifetime Cap Loophole

03/18/2010 05:12 am ET | Updated May 25, 2011

As a New York State Assemblymember serving on the Insurance committee, I hear hundreds of stories about our current insurance system and the ways it can fail consumers, whether it be denying coverage for preexisting conditions or not covering necessary preventative care. I have high hopes that health care reform will finally put an end to the worst of the insurance company practices, and I commend the President and the Democratic members of Congress for working so hard to ensure that every single American can get the coverage they need.

But there is cause for concern that one of the most pernicious features of our current insurance system--lifetime and annual insurance coverage caps--may in fact not disappear, despite assurances from President Obama and high-ranking members of Congress that they would be removed as a part of health care reform. The current language in the Senate bill would not only grandfathers in every existing policy with a lifetime limit, but it would only ban "unreasonable" caps on new insurance policies. As every legislator knows, that's a loophole an insurance company executive can drive a truck through.

Lifetime and annual insurance coverage caps are provisions of many insurance plans that limit the total dollars in benefits that the insurance plan will pay out over the lifetime of an enrollee in a plan. Approximately 91 million people are covered by plans subject to lifetime limits, most frequently a cap of 1 million dollars over the course of their life. Most of these 91 million people have no idea how quickly $1 million can evaporate with a single catastrophic illness or accident. And for people with a chronic illness, a lifetime insurance cap is a ticking clock that eventually forces them to skimp on needed treatment or often, fall back on Medicaid services to survive.

Why are lifetime and annual insurance coverage caps so pernicious? It's because they are only an issue if the policy holder or a dependent becomes seriously ill. They affect the most vulnerable patients and can destroy a family's finances in a heartbeat--families that had been faithfully paying their premiums and thought their insurance would cover them in the event of a serious illness or accident. At a time of crisis, the last thing a family should have to worry about is whether their insurance will cover a life-saving treatment.

As if we needed another argument besides the obvious moral obligation we have to our sickest and most vulnerable, removing lifetime insurance caps would also save us money in the long run. When people run up against their cap, they often fall back on government run programs like Medicaid, sometimes quitting a job or even filing for divorce to meet income requirements. All of us who pay taxes are taking up the slack for insurance companies that are not fulfilling their basic promise--pay us and if you get sick, you will be covered. Assuming that Medicaid would replace just half the benefits lost due to lifetime caps, Medicaid could save more than eleven billion dollars over the next ten years.

I can only ask that those in Congress remember that we who are privileged enough to hold elected office have an obligation to protect those in society that cannot protect themselves. The promise of health care reform is a promise to the American people that their access to health care will not be dictated by arbitrary limits and that in their times of greatest need, they will not be abandoned. I urge our members of Congress; please follow through on your pledge--immediately eliminate limits on annual and lifetime caps on new and existing insurance policies.