Consumers Protected from Catastrophic Medical Debt:
No More Annual and Lifetime Limits
Maine has a new law that stops health insurance companies from setting total
lifetime and annual spending limits. This new law applies to private health
insurance coverage issued or renewed on or after January 1, 2011.
Right now in Maine, health insurance policies have lifetime limits as low as
$45,000 and as high as $5 million. The most common lifetime limit is $3 million.
Some also have annual limits of $500,000 or $1 million.
These limits can be disastrous for people with serious illnesses who have many
medical bills. People with cancer or a chronic disease, such as hemophilia or
multiple sclerosis, for example, can easily have total lifetime medical costs
greater than $3 million. Once people hit the limit, they have had to pay 100%
of their medical expenses. The new Maine law enacted this legislative session
will stop this from happening.
The new federal health care reform law also bans lifetime and annual limits.
The limit on lifetime bans starts in September 2010. Insurance policies that
are issued or renewed in September or later may not include lifetime limits.
The federal law allows reasonable annual limits until 2014. But, people in Maine
will get early protection (beginning in January 2011) from annual limits thanks
to the new State law.
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