More Hitting Cost Limit on Health Benefits
Sunday, January 27, 2008
A small but growing number of American families beset by major medical problems are learning the hard way that simply having health insurance is sometimes not enough.
Those who need organ transplants or who have hemophilia, Gaucher disease or other costly chronic illnesses can easily rack up medical bills that blow through the lifetime benefits cap of $1 million or more that is a standard part of many insurance policies.
That has left some very sick people facing health-care tabs of hundreds of thousands of dollars or more, prompting their families to seek help from the government, or to scramble to change jobs or even divorce for no other reason than to qualify for new health insurance. And it has led some advocates for the chronically ill to plan a new lobbying effort in hopes of persuading Congress to require that insurers increase lifetime caps to as high as $10 million.
Statistics on how many people exceed the lifetime caps are hard to come by, but advocates note that the amount of many caps hasn't changed in decades, or at least has not kept up with health-care inflation and the sky-high cost of lifesaving new therapies, making it more likely that people will reach the limit.
"I hear from a lot of families that know that they are coming close to their cap," said Rick Lofgren, president of the Children's Organ Transplant Association, a nonprofit organization in Bloomington, Ind., that helps raise money for kids who need transplants. "It does happen pretty regularly in transplant cases."
The Resk family of Portland, Ore., knows the problem all too well. At age 6, Hayley Resk was diagnosed with primary sclerosing cholangitis, a progressive liver disease that scars and inflames the bile ducts, and whose most famous sufferer was the late football great Walter Payton. The family's insurance had a lifetime benefits cap of $1 million per person, but it also limited coverage for transplants to $250,000 -- not enough to pay for the liver transplant that Hayley, now 14, received from her mother on Feb. 12, 2007.
"It is very difficult emotionally and frustrating," said Hayley's father, James Resk, a pediatrician. "You can go through the $250,000 pretty quickly. We didn't have a lot of complications. Ours went very smoothly. But we went through that [cap] with about a one-week hospitalization for my wife and 10 days for my daughter."
Although his wife and daughter are doing well, Resk is still paying the $60,000 of the hospital bill that was not covered. But he protected his family against future expenses by persuading the other three doctors in his small practice to switch insurers in March, effectively giving everyone a brand new $1 million lifetime cap (and a new $250,000 transplant limit), he said.
In suburban Chicago, Lary Pane, 58, a dentist, is desperately trying to figure out how to pay for an intestinal transplant for his 19-year-old son Alex, who has had 17 major surgeries in his lifelong battle with an intestinal condition that makes him unable to eat and digest food normally.
Alex, who takes daily nutrition intravenously and whose medical bills average about $100,000 a year, has already gone through $1.4 million of the $2 million lifetime cap in the $300-a-month policy he has through an Illinois state insurance program for people unable to obtain private coverage. But the transplant is expected to cost $600,000 or more, and Alex will require special medical care for the rest of his life.
"It's not anything I can change, so I've just got to suck it up and deal with it," Alex, a part-time college student, said of his condition. "The finances, that definitely worries me. Once it runs out, it's kind of up in the air with what we're going to do. I don't know what I would do without insurance."
The family is exploring whether Alex can be classified as disabled by the Social Security Administration, making him eligible for federal health coverage through Medicaid, his father said.
"We're trying to explore all the angles, and it's pretty tough," Lary Pane said. "It makes you feel lousy. You'd think in a country like this, there would be means to take care of people. I worked all my life, and my parents worked all their lives. Possibly we can get him in public aid or something, but you know there's a stigma attached to that, too. It's completely frustrating."
Mohit Ghose, a spokesman for America's Health Insurance Plans, an industry group, said the answer to the problem lies not in raising the caps but in tackling the ever-spiraling cost of new therapies, drugs and medical devices to get more value from every health-care dollar.
"Are we in a position to pay a quarter-million dollars for a course of treatment as a nation, or is there a way that the public and private sectors can work together to shore up the mechanisms that are used to pay for those high-cost treatments?" Ghose asked. "What we are saying is that there's got to be a better way of helping those with the highest health-care costs. And consequently, we need to be addressing those costs very directly -- not just the fact that people are incurring those costs, but why are those costs so high?"
The predicament of those who burst through lifetime insurance caps is largely ignored in the debate about overhauling the U.S. health-care system, which focuses mainly on improving access to insurance at a time when a record 47 million people lack coverage. But the new political appetite for reform is one reason the National Hemophilia Foundation has decided to revive a lobbying effort, previously pursued in the 1990s, to significantly increase the caps, said Glenn Mones, the group's vice president for public policy.
"We decided this year to start pushing it more vigorously again," Mones said. "The majority of people who have private insurance don't have super-low caps, but there are enough of them for it to be a problem. . . . Where you really have a problem is the people who have the $1 million and $2 million caps, especially if they develop complications. It's something that we have to pay a lot of attention to."
An annual survey by the Henry J. Kaiser Family Foundation found that 55 percent of workers with employer-based coverage had a lifetime limit in 2007, including 23 percent with a cap of less than $2 million. That was up from about 50 percent who faced a cap in 2004.
Three of Kerry and Chuck Fatula's four boys have hemophilia, a rare inherited bleeding disorder that prevents their blood from clotting normally. All three punched through the $1 million lifetime cap in the Pittsburgh area family's private insurance policy within a few months of one another in 2004, their mother said.
The clotting factor they take to prevent and control bleeding costs about $150,000 a month, and at various times each has been hospitalized for internal bleeding or to treat infections of the ports that allow them to take medication intravenously, Kerry Fatula said. For now, Medicaid pays medical bills for all three. But the eldest, Paul, a senior in high school who physically can do "90 percent" of what his healthy peers can, recently turned 18 and must qualify as a disabled adult to retain federal assistance, she said.
The family could try for new insurance if Chuck, 42, a field service technician for a specialized engineering company, found a new job, but he has invested more than a decade in the company, and finding a comparable position elsewhere would be difficult, she said. Kerry Fatula, 40, does not get coverage through her work with the hemophilia foundation's western Pennsylvania chapter.
"I could try and find a job that would get me insurance, but I just doubt that I could. I don't have a long work experience, because I was staying home with the kids for so many years," she said. "It's really scary as a parent to wonder from one month to the next if your kids are going to have the lifesaving medication that they need."
In the Denver area, Nathan Wilkes, 34, who designs and builds data networks for a telecommunications company, took the extreme step of establishing his own business as an independent contractor so his family would qualify for new health insurance. Medical costs for his son, Thomas, 4, who has hemophilia, run $750,000 or more annually, and he quickly collided with the $1 million cap in his father's old company health plan.
Thomas is now temporarily insured by CoverColorado, a state program established to cover hard-to-insure Colorado residents, but he soon will join his two siblings and his parents on the new policy through his father's new business.
"Both my wife and I have become pretty fierce advocates for major health-care reform," Wilkes said. "The people that need the care the most are the least able to get it. What's tragic is that the sicker you get, the harder you have to fight to stay alive, and it has nothing to do with the illness."