Lifelong illness could create chronic problems if lifetime caps return

• More than 2 million Tennesseans could have a lifetime cap if they re-appeared in health insurance.

There are many threads in the health care reform debate that are concerning to Erin Taylor, the mom of a three-year-old son with cystic fibrosis. But the threat of being denied insurance that helps offset the costs of a potentially life-saving treatment is at the top.

Her son, Levi, was born with the genetic condition, which hurts the lungs and digestive system and leaves the body unable to break down mucus. He takes more than a dozen pills a day, including every time he eats — on top of twice-daily treatments to help break-up the mucus in his chest.

Levi Taylor will have the chance to live a pretty normal life — complete with sports, if he chooses — because of aggressive medical research funded by the Cystic Fibrosis Foundation. Despite the pills, he is still susceptible to colds that can become severe enough to require a two-week hospital stay.

Treating the disease will be forever, and it will be costly. Some children with cystic fibrosis go to more than 40 doctors appointments a year and pharmacy costs easily top $30,000. The costs can run well-above $100,000 if organs fail.

Right now, Levi Taylor is healthy and the costs of care are a big part of his parents' monthly budget. Their health insurance plans — accessed through their employers — offset much of the costs.

"You can't get more of a pre-existing condition than being born with something," Erin Taylor said. "There so many layers that worry me."

Yet, there could be a point in the future, if health care reform takes a route that reinstates lifetime spending caps in health insurance plans that his medical expenses exhaust what an insurer will pay. Or there are changes to how insurers are required to cover people with pre-existing conditions.

Congressional Republicans and the Trump administration have vowed to repeal and replace the Affordable Care Act, which removed lifetime limits on how much an insurer would spend on a member while on a plan. Under a limit system, a patient is responsible for all expenses incurred after the cap is hit.

In 2009, 55 percent of people in employer-sponsored insurance plans had a limit, often between $1 million and $2 million, according to a PWC report commissioned by the National Hemophilia Foundation, which wanted to raise or lift the caps. In the individual market, 89 percent of people had a limit, according to Brookings.

About 25,000 people hit the caps nationally — a fraction of those in employer health plans, but a situation that could carry devastating financial or health impacts. The number was expected to grow to 300,000 by 2019 given rising health care costs in the PWC report that pre-dated the ACA.

Lifting the caps was an early move by the ACA that assuaged concerns among people with serious chronic disease as well as those who received an unexpected serious diagnosis, such as cancer.

With a new round of health care reform debate raging in Washington, D.C., people with chronic diseases or serious illnesses fear the caps could re-emerge — endangering affordable access to care.

A $1 million cap might sound like a lot of money but a person with a cancer diagnosis or other serious issue, such as hemophilia, could run through the cap with a few procedures and treatments over the span of only a few years.

“When you look at $1 million, you may think that’s a lot, but, in reality, the cost of care is very expensive,” said Kevin Lucia, research professor at Georgetown University's Center on Health Insurance Reforms.

Dr. Stephen Patrick, a neonatologist at Vanderbilt University Medical Center, saw caps in action in the previous decade when his mom hit the $100,000 limit her insurance plan placed on chemotherapy less than two years into her battle with cancer. In addition to caps on overall spending, insurers could cap how much they would spend on type of care, which the ACA also eliminated.

Ironically, the limits frequently kick in when people need care the most. Insurance was designed to protect people from financial ruin if struck by a serious health diagnosis or injury. Patrick's parents, who had built a two-income house, were living off of a home equity line of credit at the time of his mother's death.

“An unforeseen diagnosis can easily put you in the red,” said John Graves, professor of health policy at Vanderbilt University Medical Center.

When nearing the cap, people before the ACA would sometimes resort to looking for new jobs so they could get on a new plan to, in essence, hit the reset button on their cap.

Even high risk pools, which states operated as a source of insurance for people who couldn’t access other insurance because of a limit or a pre-existing disease, had limits. In fact, risk pools in 33 states had lifetime limits that ranged from $1 million to $2 million.

Caps are being discussed in some pockets of GOP lawmakers — but not all — in D.C. as a way to lower health insurance costs. High risk pools are a common component in replace or repair plans.

Caps and high risk pools are necessary to keeping insurance companies solvent, said Dr. Keith Anderson, the president of the Tennessee Medical Association, which supports caps and high risk pools as part of reform. Caps and high risk pools are part of the TMA's position on how health policy reform should be shaped to ensure people have access to care, and coverage, while maintaining a sustainable system.

With repeal or replace plans still hazy, people facing expensive treatment are concerned about what the future could bring. Questions linger: Would limits would be retroactive? Would they be raised to account for inflation and increasing health care costs? What would be a recourse if they hit a cap?

If a lifetime cap isn’t indexed to general inflation, then a lot of "folks who would be in that range for a lifetime cap are probably receiving leading edge treatments," Graves said. “The rate of health care costs have outpaced general inflation a lot driven by really expensive new treatments."

Taylor thinks not only about Levi at three-years-old, but also his future — and if he will be able to access, and afford, live-prolonging treatment when he's on his own. The life expectancy of people with cystic fibrosis has increased in recent years to an average of 40, and potentially approaching normal lifespans with some of the genetically tailored treatments.

The Cystic Fibrosis Foundation's aggressive research heartens the Taylors. But as with many new frontier treatments, the cost, even for life prolonging or saving drugs, can be overwhelming.

Taylor said it breaks her heart to think there might be a therapy for Levi in the future that they can't afford, including when he is an adult.

"If we can't afford it, if we don't have access to it. It breaks my heart to think there might be a therapy in the future," Taylor said. "Not only under my roof, but when he gets out there own his own.

"I want him to be able to afford his care," Taylor said.

More than 2 million Tennesseans in employer-sponsored coverage would be in a plan with a lifetime cap if they re-appeared, according to analysis by the Center for Health Policy at Brookings and the USC Schaeffer Center for Health Policy & Economics.

There is a contingent of young working adults who, barring a personal family experience, never knew caps existed because the ACA has been in place for much of their professional life.

“It’s one of those things in the fine print of your insurance plan," said Graves. "They don’t go out there and advertise these things.”

Reach Holly Fletcher at hfletcher@tennessean.com or 615-259-8287 and on Twitter @hollyfletcher.

The fallout

2,026,666: The number of privately-insured Tennesseans who could have lifetime caps if the ACA is repealed

109 million: the number of Americans, both through employer-sponsored and individual plans, who would have a lifetime cap on benefits today without the ACA

In 2007:

45 percent of people in employer-sponsored plans had no cap

32 percent had a cap of $2 million or more

22 percent had a cap of $1-2 million

1 percent had a cap of less than $1 million

Sources: PWC, Kaiser Family Foundation, Brookings