CHAMPAIGN – With her health failing and a long list of pricey medicines she has to take, Champaign retiree LuElla McWilliams counted a lot on her insurance.
So she was stunned when a certified letter arrived in the mail Oct. 7, informing her that she'd used up her lifetime maximum insurance benefits and her coverage would end Oct. 31.
"I thought it would last us the rest of our lives," she said.
Lifetime and annual coverage limits, which could be phased out under health care reform legislation, lurk on the horizon for millions of unsuspecting Americans who haven't read their insurance policies.
A study done for the National Hemophilia Foundation earlier this year found about 55 percent of Americans insured through their employers – some 91 million people in all – are subject to lifetime coverage limits.
The dollar value of these limits has grown over the last two decades, but hasn't kept up with the huge increases in health care costs. Without an increase in the limits, the study projected, the number of people who have used up all their benefits will increase dramatically over the next decade.
The American Cancer Society Cancer Action Network knows this is already happening to some cancer patients, according to Steve Finan, the organization's senior director of policy.
When somebody hits the limit, there are frequently no other affordable coverage options, Finan said. People are left with the choice of financial ruin or stopping or cutting back on their treatments.
"They usually wind up being desperate," he added.
McWilliams, who was covered through her husband's former employer, Caterpillar, was notified by the company that she had reached her lifetime benefits limit.
Caterpillar spokeswoman Bridget Young said Caterpillar sends letters monthly to employees approaching their coverage limits and refers them to Caterpillar's benefits center at Hewitt Associates for questions. Caterpillar is self-insured, and Hewitt determines eligibility for plan members.
"There are, in fact, some populations at Caterpillar who are impacted by a lifetime maximum for their Caterpillar health care spend," she said in an e-mailed response to The News-Gazette.
"I just had no idea they could do this, write you a letter saying in three weeks you're not covered," said LuElla, a 77-year-old former caterer and day care operator who married her husband, Glenn, 13 years ago after the two of them were widowed.
What she does know is, she needs the coverage. She's been in and out of the hospital in recent years. She suffers from congestive heart failure and diabetes. She's on her second pacemaker and due to get a third one installed early next year. And the cost of her medications exceeds $1,600 a month.
The McWilliamses scrambled fast after receiving the letter from Caterpillar, switching some prescriptions to lower-cost generics and then transferring all of them to a Wal-Mart pharmacy to save money. They also lined up a Medicare Advantage plan with prescription drug coverage for LuElla.
But with all those medications, she and her husband fear, she's going to quickly wind up in the notorious Medicare "doughnut hole" that leaves a significant gap in drug coverage.
The McWilliamses say they've added up all the new expenses they now face due to the loss of LuElla's coverage and figure it will run them $6,000 to $7,000 more a year. Their house is paid for, they say, but they worry about meeting other expenses and winding up a burden on their children.
"We didn't ever think we'd have to be a burden," LuElla said.
Yet another stress: The McWilliamses wonder whether they're paying for LuElla's new coverage through Health Alliance Medical Plans for nothing. When Glenn's son, David McWilliams, started making some inquiries, it sounded as if LuElla is still covered, they said.
David McWilliams said he was told by United Healthcare (Caterpillar's medical claims processor) and Hewitt that several letters like the one sent to LuElla were in error, and he was directed back to Caterpillar to find out where his folks stand in terms of reaching their benefits limits.
A promised answer from Caterpillar still hasn't arrived, he added. Hewitt referred an inquiry from The News-Gazette back to Caterpillar.
Finan, of the American Cancer Society Cancer Action Network, said one of his organization's original goals in health care reform has been to rid patients of coverage limits that defeat the very purpose of health insurance for someone in bad health – to protect against a catastrophic loss.
It's fairly common for employer health plans to have such high limits that many people never hit them, he said, but his organization has also found some annual coverage limits as low as $50,000.
Both House and Senate reform bills forbid lifetime limits, and the House bill phases out annual limits over time. Efforts are under way to close a loophole in the Senate bill, which, as it currently stands, would allow the Secretary of the Treasury to determine what an unreasonable annual limit would be, he said.