Health Insurance Articles
Do All Health Care Plans Have A Lifetime Maximum Benefit
2010-01-10
Health insurance coverage varies greatly between health insurance companies. Different companies offer a wide range of coverage options. Additionally, coverage between health care plans can greatly differ. With all the options available, many people do not realize that health insurance can have a lifetime maximum benefit. This means that once paying out a certain amount for health care, an insurance company would no longer have to pay benefits, regardless of the premium amount paid by individuals and employers. While not all health care plans have a maximum benefit amount, the majority of HDHP/SO and PPO plans have a maximum lifetime benefit. The majority of HMO and POS plans do not. It is estimated that 75 percent of all HMO plans have no maximum benefit limit.
According to The Kaiser Family Foundation and Health Research and Educational Trust, on average, 45 percent of health care plans have no limit on lifetime maximum benefits. With an average of 55 percent of all combined health care policies having a lifetime maximum benefit, the majority of those reach the maximum allowed health insurance coverage at $2 million or more. However, some health insurance policies have a lifetime maximum benefit of $1 million or less. PPO and POS plans, which have a maximum lifetime benefit, are equally divided between $1 million and $2 million limits, whereas the majority of HDHP/SO plans have a limit over $2 million. Some plans have additional yearly benefit limits within the lifetime benefit amount. When choosing a health care plan, it is best to pick one with a high maximum lifetime payout or no limit at all.
It may seem like $2 million, or even $1 million dollars is a lot money to pay out, especially for someone in good health. However, one major episode, illness or emergency can easily add up, causing the policy to quickly reach its limit. Once the limit is reached, the plan will no longer pay benefits and the rest will have to be paid out of pocket.
Employers who offer health care plans will often choose plans with lower benefit limits in order to reduce their expenses. Choosing a health care plan with high deductibles and lower maximum lifetime benefits will result in a lower premium. On the opposite end, lower deductibles with a high or no maximum lifetime benefit will result in higher premiums. When choosing a health care plan, it is essential to understand what is included, along with the plan's limits, in order to obtain a policy that will meet an individual's needs. In order to determine a health care plan's lifetime maximum benefit, consultation with an insurance agent is recommended as they can answer any other health insurance coverage questions that may arise.
