FYI...a timely discussion considering Don and Mary's plight and the
costs involved.

TMT

http://www.aarp.org/health/health-ca...explained.html

Health Care Reform Explained

The New Health Care Law and Annual and Lifetime Coverage Limits
Your questions answered

by: Susan Jaffe | from: AARP Bulletin | August 23, 2010

— Red James/Getty Images
Q. Does the new health care reform law eliminate annual and lifetime
limits on health care coverage in insurance policies?

Yes. On Sept. 23, lifetime limits are effectively banned for all plans
that begin or are renewed after that date. Insurance companies can no
longer cut off policy holders when their medical expenses reach a
lifetime limit. Annual limits on coverage will be phased out over the
next few years, beginning this year.

Currently, more than 100 million Americans have insurance that stops
when medical claims exceed their policy’s lifetime limit. The new rule
especially will help people with serious diseases that require
expensive treatment. Ten percent of cancer patients surveyed recently
said they hit their lifetime limit and their insurers would not pay
for further medical care. Federal health officials mention the example
of an Indiana teenager battling leukemia who reached the $1 million
lifetime limit on his family’s policy in a couple of months. To pay
for his bone marrow transplant, his desperate parents appealed to the
public for donations and raised more than $500,000.

The law phases out these annual limits over a period of three years:
in the first year, insurers must cover medical expenses up to at least
$750,000. That coverage rises to $1.45 million after Sept. 23, 2011
and increases to $2 million after Sept. 23, 2012. Limits will be
completely banned starting Jan. 1, 2014.

The ban on annual and lifetime limits applies to employer-sponsored
and individual plans, but only for the cost of what the law calls
“essential health benefits.” The law provides examples of these
benefits, but the specifics will be spelled out in regulations to be
issued by the U. S. Department of Health and Human Services. Patient
advocacy groups are hoping that the government will decide that a wide
range of health care services must be covered.

There are other exceptions to the ban. It doesn’t apply to so-called
“grandfathered” plans, which are insurance policies in existence when
the health care reform bill was signed into law March 23, 2010 that do
not significantly raise premiums or reduce benefits.

• Are Medicare supplemental and Medicare Advantage plans also
prohibited from limiting coverage?

Yes, for the most part, but not because of the health care reform
law’s ban. Medicare supplemental insurance (medigap) and Medicare
Advantage plans are regulated by earlier laws that already prohibit
annual and lifetime limits. However, medigap policies sold before 1992
can impose limits.

Medicare Advantage plans have no lifetime limits because they have to
offer coverage that is at least as good as traditional Medicare, says
Vicki Gottlich, senior policy attorney at the Center for Medicare
Advocacy in Washington, D.C. “There has never been a cap on the total
amount of benefits for which Medicare will pay,” she explains. So
Medicare Advantage plans have to follow suit.