Many insurance policies, such as long-term care insurance and dental insurance, use these provisions, but lifetime maximum benefits are most often linked to health insurance.
The Affordable Care Act Changed Lifetime Limits
The ACA, also known as the Patient Protection and Affordable Care Act (PPACA) or “Obamacare,” eliminated lifetime maximum benefit clauses in health care policies for essential services in 2010 when the legislation went into effect. Dental and vision coverages included in health care plans may have maximum yearly benefits and lifetime maximum benefits. Oral and vision care are deemed essential for children, but not for adults.
No Lifetime Maximum Benefit for Essential Services
Policies issued or renewed on or after Sept. 23, 2010, can’t have lifetime benefit maximums. The ACA also removes health care insurers’ ability to place yearly maximums on essential health benefits. People have access to urgent medical care and treatment without having to worry about exceeding a limit as a result. These are essential services as defined by the ACA:
Ambulatory patient servicesEmergency servicesHospitalizationPregnancy, maternity, and newborn care Mental health and substance use disorder servicesRehabilitative services and devices Laboratory servicesPreventive and wellness services and chronic disease managementPediatric services, including oral and vision carePrescriptions
Do Lifetime Maximum Benefits Vary by State?
Lifetime maximum benefits for essential health benefits are not permitted in any state. There are no lifetime or yearly maximum benefits clauses for essential services anywhere in the U.S. But lifetime maximum benefits for non-essential services can vary by state and by health insurance plan. You could end up paying much more in the long term after the yearly or lifetime maximum is reached if your policy has a lower lifetime maximum benefit on non-essential health benefits.
How a Lifetime Maximum Benefit May Be Applied
You should know whether there’s a lifetime maximum benefit in your health insurance plan and, if so, what non-essential services it might apply to. Your health insurance provider monitors the amounts that it’s paid over your lifetime. It will let you know when you’re closing in on your non-essential services limit.
Are Lifetime Maximum Benefits a Concern?
Lifetime or annual maximum benefits are a concern for every policyholder because they mark the point when your insurance stops paying for medical services and directs the costs to you. But the definition of essential health benefits and the role the ACA has played in helping people with health insurance get fair and adequate protection have changed the level of concern. Access to essential services with no limits greatly improves the quality of life and benefits for insured individuals. The ACA reduced consumers’ concerns for lifetime maximum benefits because it no longer applies to essential health benefits.
