June 07, 2020
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Bill would prohibit caps on insurance

AUGUSTA, Maine — A bill that would prohibit health insurance companies from capping the amount of money they will spend covering policyholders drew an impassioned crowd to the Insurance and Financial Services Committee room at the State House on Wednesday.

The bill, LD 1620, would do away with the insurance industry practice of terminating payment of insurance claims based on a policyholder reaching an arbitrary annual, lifetime or other threshold.

Proponents of the measure argued that most people are unaware their policies are capped until they are suddenly denied coverage and are thrown into financial crisis. Opponents — all representing the insurance industry — said eliminating caps would lead to an increase in the cost of individual and small-group coverage.

Theresa D’Andrea of Limerick said she and her husband, Rocky, were shocked to discover that the coverage they had paid for faithfully for several years came with a $250,000 cap. When Rocky was diagnosed in 2008 with malignant melanoma, it didn’t take long to hit that cap.

“Now we are struggling to meet our mortgage, our credit cards are maxed out, we’ve spent all our savings and retirement, all because my husband got cancer,” D’Andrea testified.

The bills keep piling up, and Rocky was unable to testify at the public hearing because he was receiving a blood transfusion, she said.

“My husband and I have worked hard our whole lives. We’ve paid our taxes. He even served in the Vietnam War — when his government called, he answered right away,” D’Andrea said in her testimony. “We figure we’ve paid about 60 years worth of taxes and money to Medicare, Medicaid and Social Security. And yet now we are in financial ruin. We are asking ourselves who will answer our call for help?”

Former emergency physician Paul Lebow told the committee that he, too, ran into a benefits cap he never suspected existed. After undergoing a heart transplant and extensive treatment for complications, he said, his insurance company denied payment for a $20,000 heart catheterization because he had reached a $1.25 million lifetime limit.

“I thought I didn’t have to worry about paying my medical bills because I had insurance,” he said.

Instead, he said he finds himself without any coverage and doing what he can to avoid becoming ill or triggering his ongoing cardiac problems.

A parade of consumer advocates spoke in support of the legislation, including representatives of the Maine Chapter of the American Cancer Society, the Maine Women’s Lobby, the Maine Medical Association, Consumers for Affordable Health Care and the Catholic Diocese of Portland.

Mitchell Stein, a public policy consultant and a representative of the Maine Council of Churches noted that some insurance companies began imposing $1 million caps in the 1980s. In 2010 dollars, he said, an equivalent cap would be $10 million.

Insurance Superintendent Mila Kofman also testified in favor of the bill.

“Lifetime limits hurt people with catastrophic illness,” she said. “Health insurance needs to work for you when you are sick and not just when you are healthy.” She cautioned that eliminating lifetime caps could raise the cost of health insurance, but said a survey of insurance companies doing business in Maine indicates that the increase would be small — about 0.4 percent.

Kofman said most Mainers insured in large employer-based groups do not have caps on their benefits, but a growing number in the small group and individual market do.

Anthem Blue Cross and Blue Shield, the largest carrier of small group and individual plans in Maine, began including a $3 million cap in many of those policies this month. Testifying on behalf of the insurance company at Wednesday’s public hearing, Christine Ossenfort said caps are needed to protect insurers and hold down costs for most consumers.

It is rare that anyone reaches or exceeds a benefits cap in Maine, she said.

Other insurance providers also testified in opposition, including lobbyist Dan Bernier, representing the Maine Association of Insurance Underwriters. Bernier said benefit caps “keep the actuaries happy” by protecting against unlikely losses. While decrying the D’Andreas’ $250,000 cap as inadequate, Bernier advised the committee members to consider setting a minimum cap of $3 million — high enough to meet the needs of the great majority of individuals while still protecting insurers against “remote possibilities.”

A work session on the bill is scheduled for Tuesday, Feb. 9.

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