Lifetime Caps and the ACA
Much of the Affordable Care Act was legislation changing standard insurance practices. The most famous of these changes was the ban on excluding insurance applicants who had pre-existing medical conditions (or insuring them but cutting out any coverage related to a pre-existing disease or injury).
But equally dramatic was the ACA’s ban on “Lifetime Caps.”
Before the ACA, it was common for private insurance companies to put a limit on the total amount of insurance a person could claim for medical care. These contractual limits (usually $1 million) were known as “Lifetime Caps.” If a person had a serious accident or an expensive disease such as hemophilia, multiple sclerosis, or AIDS, they often ran out of insurance, even if they had paid all the premiums and followed all the company’s rules.
But that’s just for private insurance companies you might be saying? Did the ACA make Lifetime Caps illegal for Medicare too?
Here is where it starts to get interesting. There has never been a Lifetime Cap on Medicare. Since its inception, Medicare has paid for health care for our seniors, no matter how expensive they were, or how long they lived.
Switching from Medicare to Vouchers for Private Insurance
“Privatization of Medicare means changing Medicare from a guaranteed benefits program for seniors into a premium assistance program: a voucher or coupon an individual uses to buy insurance on the open market.” [Citation, emphasis added] Paul Ryan’s proposal “A Better Way” is based on a voucher system.
Mr. Ryan and other advocates of privatization do not throw all seniors into the same “one-size-fits-all” category. In fact, under Mr. Ryan’s plan:
“The Medicare premium support payment would be adjusted so that the sick would
receive higher payments if their conditions worsened; lower-income seniors would
receive additional assistance to help cover out-of-pocket
costs; and wealthier seniors would assume responsibility for a greater
share of their premiums.” [emphasis added]
Setting aside the obvious political implications of having wealthier seniors “assume responsibility for a greater share of their premiums,” this quote supports the argument I am trying to make.
The reason poor seniors would get heftier vouchers is that insurance companies would set premiums based on the health status of the person (another standard insurance practice that was prohibited by the ACA). With all the ACA insurance protections removed, the elderly would be buying policies just like the ones younger Americans obtained “in the good old days.”
My question is: If tomorrow’s elderly are covered under private insurance plans, will those policies also include Lifetime Caps, resurrected after the death of the ACA?
In my last Fontenotes, I mentioned my healthy and independent 91 & 94-year-old parents. That does not come without cost. Increasingly they have needed physician attention, additional medications, and occasional procedures and surgeries. I do not know how much Medicare has paid for their care these last 27 and 29 years. Have they reached their million-dollar limit? Perhaps not, but do I want to add the concern of running out of coverage to the years they have left?
How about your parents? What is on their account at this point in their lives? Have they had major heart surgeries? Cancer? Skilled nursing care? *
I understand we need to figure out how to rein in Medicare costs, but putting our elderly on standard insurance plans suggests cost-control in a back-handed manner most will not wake up to until they reach the end of their insurance (life-saving) rope.
Is it Possible Senior Insurance Plans Will be Different?
The scenario I am painting might seem far-fetched. I hope it is.
Perhaps we can create insurance policies for our seniors that they can purchase with their vouchers that do not have Lifetime Caps, or pre-existing condition clauses, or price gouges for sicker people.
But adding that kind of regulation would be exactly like the regulation the GOP is so anxious to kill with the ACA.
Maybe privatizing Medicare is where we are heading. Maybe Americans will all decide it is necessary- even favorable.
But as we take on far-reaching reform of something so near and dear as Medicare I think all voters must consider what privatization truly means. To do that our political leaders owe us all the details and implications of their plans.
* The last time Paul Ryan was advocating for a voucher-based Medicare program he was the Vice-Presidential candidate with Mitt Romney. To make the plan more politically palatable he was then suggesting a delay until 2023- presumably, so current Medicare beneficiaries wouldn’t vote against it. Which leads me to another question. How old will you be in 7 years?
Want To Know More?
A Summary of “A Better Way” [Speaker Paul Ryan’s plan] is available here.
The political risks of changing Medicare are obvious, and not lost on Democrats looking to regain some of the power they lost in this election. Here is an editorial by Paul Waldman [ The Washington Post ] that discusses that further.
When a topic becomes untouchable for politicians, it is referred to as “The Third Rail of American Politics.” Social Security is usually given this moniker, because “with the possible exception of Medicare, Social Security is the most successful and therefore beloved social program in American history.” [citation, emphasis added]
If you want to know more about Ronald Regan and his position on Medicare, you can find a recording of his program “Ronald Regan Speaks Out Against Socialized Medicine” (and a great picture) here.