Managing Your Health Insurance Lifetime Limits

If your health insurance plan has a lifetime limit, when you reach your cap, your insurance coverage ends
Author: David Linney

See also Lifetime Insurance Limits.

Some health insurance plans have lifetime limits—typically $1 million or $2 million—and when you reach your cap, your insurance coverage ends. This is a major concern to people with hemophilia and other bleeding disorders because of the high costs of their healthcare.

Estimating when a lifetime limit may be used up is a “guesstimate.” While you can estimate annual costs for expected factor product use and regular medical services for things such as doctor visits, drugs and clinic visits, you cannot estimate unexpected care costs for extra factor treatments, hospitalization, surgery, accidents or a new inhibitor diagnosis.

In the following example, you can see how quickly a lifetime limit can be reached for a teenager with severe hemophilia.

Sample Projected Annual “Regular” Costs and Impact on Lifetime Limit for an Adolescent with Severe Hemophilia A

Factor Product (prophylaxis three times per week at $2,000 per treatment): $312,000
Clinic Visits: $2,000
Doctor Visits: $1,000
Drugs: $1,000      
Projected Annual Costs: $316,000

1.684 million (of $2 million) lifetime limit remaining  ÷  $ 316,000 =  5.33 years

As a general guide, a lifetime limit is threatened if you project two to four years or less left for regular expenses. The magnitude of the “threat” will be related to your ability to obtain other insurance.

Knowing how much you have used of your lifetime limit is very important. Call your insurance company on a regular basis to track the status of your lifetime limit. You can also track the limit yourself by keeping accurate records. An example:

Lifetime Limit Tracking Form $2 million limit

Date: 1/05/10 Amount Remaining: $1.684 million

Date of Service/Provider/Cost/Limit Remaining

1/11/10   DEF Home Care            $20,000            $1,664,000
1/20/10   GHI Hospital                 $5,000              $1,659,000
On rare occasions, insurance companies do not accurately track lifetime limits and will report lower figures to policyholders. This becomes a major problem when the insurance company updates the lifetime limit dollars used and you find, for example, that you have $300,000 less in your lifetime limit than you calculated or that your limit has been reached. Redress may be difficult because it will come under insurance plan administration, and addressing such an issue is not in the plan administration rules. Keeping an accurate tally of your limit from the beginning is strongly advised. 

If Your Lifetime Limit Is Threatened

Don’t panic. Some of the things you can do include:

1. Ask for help. Contact your hemophilia treatment center (HTC), your prescribing hematologist’s office, the case manager or pharmacy manager from your insurance company, your local NHF chapter, HANDI, other hemophilia organizations, Patient Services Inc. (PSI) or ACCESS.  

2. The per-unit cost of clotting factor charged by your HTC or home care company is the key variable that affects lifetime limits. (The per-unit cost is the approved rate negotiated between the HTC or home care company and the insurance company.) If your HTC or home care company charges twice as much as another, your lifetime limit will be used up twice as fast. You need to determine if your HTC or home care company is charging a competitive price. First, find out what you are paying per unit for home care factor product by taking the following steps:

  • Call your HTC or home care company to determine the per-unit price. Be aware that your HTC or home care company may not divulge the cost, because it has a contract with your insurance company, not you.
  • Call a case manager or pharmacy manager at your insurance company to verify the per-unit price.
  • Review an insurance Explanation of Benefits (EOB) statement. If you know how many units you ordered on a date of service, you can figure out the cost from the EOB. Example: Patient ordered 15,000 units of clotting factor on 02/08/10. On the EOB, insurance approved charges of $15,000 for the 02/08/10 date of service: $15,000   ÷    15,000 units =   $1.00 per unit

If you determine that your HTC’s or home care company’s factor product price is high, find another company that provides a quality service at a lower price.

3. Check to see if your insurance plan has a separate drug plan that covers factor product without affecting the lifetime limit. If it does, order factor product through the drug plan. Make sure there is no monthly or yearly limit on the drug plan.

4. To save lifetime limit costs, ask your HTC if you are eligible to participate in a factor product clinical trial.

5. Long before you reach your lifetime limit, determine insurance and payment resource options with your “help” contacts (i.e., your HTC, local NHF chapter, HANDI, other hemophilia organizations, PSI or ACCESS).

Insurance options include:

  1. Open-enrollment insurance plan options through employer
  2. Spouse’s employer insurance
  3. New employer insurance (i.e., if you change jobs)
  4. A special request to your employer to extend lifetime limit
  5. State high-risk plan or state individual plan
  6. Medicaid (through a number of programs)
  7. Medicare disability

Available payment resources—which are not a substitute for insurance—include: 

  1. State Children with Special Health Care Needs Program
  2. State Hemophilia Program (available in many, but not all, states)
  3. Manufacturers’ factor product assistance programs

Planning and thoroughness with expert help are the keys to successfully managing your lifetime limit. No one can manage your lifetime limit better than you.