Health Insurance Articles
Finding Out Whether Your Health Insurance Policy Has A Cap
2010-01-28
Health insurance is designed to mitigate the cost of regular treatments and also pay out in times when a patient is in need. Sadly, many policies come with a cap to their services, which is the maximum amount that an insurer will pay, be it over a year or over the lifetime of the policy holder. This limit to health insurance coverage can leave a client stranded and strapped for cash at the worst possible times. It is worth knowing if an insurance policy has a cap, what it is, and what can be done about it.
The first thing to do is to understand how caps work. There are typically two types of health insurance policy caps - annual and lifetime. An annual cap is the total amount an insurer will pay out per year. Lower-cost options such as self-directed health care plans will have lower caps. These annual caps could range anywhere from $1,000 to $10,000 or more, and some will roll over into the next year if not used. A lifetime insurance cap is the maximum amount an insurer will payout over the entire life of an individual they cover. A small employer group plan, for example, might have a lifetime cap of $1,000,000. While this number seems large, it can be used up in just a few months if repeated surgeries or multiple medications are needed.
In order to check if a health insurance policy has a cap, begin by reading over the policy statement. Some will declare on their benefits chart exactly what the cap is and for what period of time. Others will hide the cap in the fine print, or couch it in language that is hard to understand. If there is any confusion about the cap, call the insurance broker. If that is not an option, call the company directly and ask for a detailed explanation. They should be able to provide exact numbers and indicate where this information can be found on the policy. If it appears that what is being said does not appear on the policy, ask for the details of the cap in writing. Insurance companies will often use gaps in documentation in order to not have to pay pay claims, and what was said in a telephone conversation will hold very limited legal force.
Many health plans now offer caps of up to five million dollars, but even that can be used up quickly in the case of a long-term or debilitating illness. Reviewing a policy and having proper documentation is crucial for understanding how much a plan covers when it is needed most.
