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Some left helpless by low caps on health insurance
$1 million lifetime limit is easily reached
AP Photo
Mary and Danny Wusterbarth and daughter Brea, 3, who had a heart transplant, and now insurance companies refuse to cover her.
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Published: July 14, 2008
WAKE FOREST
Mary Wusterbarth thought that her toddler was struggling with an ear infection when she seemed sluggish. Instead, a virus had attacked the little girl's heart, damaging it beyond repair. Brea needed a transplant.
Within three weeks of a 2007 doctor visit, the 20-month-old had exhausted the $1 million lifetime maximum on her health insurance. Her parents have scrambled ever since for ways to cover thousands of dollars in monthly medical costs.
"We have no idea what kind of financial future we have," said Wusterbarth, who lives in Wake Forest. "The medical bills come almost daily. There's never an end."
A stay-at-home mother with two other children, she thinks that legislation on minimum lifetime caps is an excellent idea. Brea is 3 now and doing well, but family finances aren't as healthy.
The Wusterbarths spent more than $20,000 to adopt Brea from China in 2006. Then her heart began to fail, just months after she arrived at their Louisiana home.
She qualified for Medicaid while hospitalized for the transplant, but that coverage ended once she was released. The family has since moved to North Carolina, where Brea's father, Danny, works as an operations manager for a distribution center.
They drained their savings and spent more than $60,000 out of pocket on medical bills in the past year. Church donations have helped, and they negotiated some discounts to wind up with $50,000 in insurance coverage for Brea that they hope will last the next six months.
But Danny Wusterbarth makes too much money for Brea to get Medicaid coverage. Insurers won't cover her because of the medical history, a common problem with people who reach caps.
"We were actually told that if we would get a divorce or if he would quit his job, then she could get all the help she needed," Mary Wusterbarth said. "But that's not the way we do things, so we just take it day by day."
Brea's anti-rejection drugs run about $3,000 a month. The biopsies that she needs every few months to check for rejection can cost $40,000. She will also need another transplant in about 10 years. Her mother isn't sure where all the money will come from.
Insurers set lifetime limits to keep rates low on some policies, but holders are learning that individual caps that seemed large quickly max out as health-care costs soar. Several patient-advocacy groups are prodding insurers to raise the caps, which generally don't adjust for inflation. Congress also is considering two bills that would do that.
Only 1 percent of employer-offered group plans -- the largest health-insurance segment -- had caps as low as $1 million last year, according to a survey by The Henry J. Kaiser Family Foundation. But 22 percent had caps of less than $2 million, and some want to see all these relatively low maximums eliminated.
Insurers, however, say that most health coverage already offers either a comfortable maximum of several million dollars or unlimited coverage. They note that more government regulation could lead to higher coverage costs, and low lifetime caps help them offer a greater variety of coverages.
Insurance can shield patients from the true cost of health care, said Jerry Flanagan, the health-care policy director for California-based Consumer Watchdog. He noted that most people have no idea how quickly $1 million "can evaporate," unless they've been seriously ill before.
"You can eat through a million-dollar lifetime cap in two or three surgeries," he said.
The Kaiser Family Foundation study says that a greater percentage of employer-offered group plans are providing lifetime caps of at least $2 million, and the percentage that offer caps below $2 million has declined slightly.
"The nature of caps is that over time it becomes easier and easier to hit (them) because the cost of health-care services keeps going up," said Mike Thompson, a health-care and employee-benefits expert for PricewaterhouseCoopers Health Research Institute.
A coverage cap of $1 million in the 1970s would have had to grow to more than $10 million today to keep pace with rising costs, said Glenn Mones of the National Hemophilia Foundation.
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