[Congressional Record Volume 143, Number 76 (Thursday, June 5, 1997)]
[Extensions of Remarks]
[Pages E1139-E1140]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]




  INTRODUCTION OF LEGISLATION TO RAISE THE INDIVIDUAL LIFETIME CAP ON 
                            HEALTH INSURANCE

                                 ______
                                 

                           HON. ANNA G. ESHOO

                             of california

                    in the house of representatives

                         Thursday, June 5, 1997

  Ms. ESHOO. Mr. Speaker, I'm pleased today to introduce legislation to 
raise the individual cap on lifetime health insurance payments to $10 
million for group insurance coverage.
  The current standard lifetime cap is like a dinosaur from Jurassic 
Park--a relic from another age that can still be hazardous to those who 
get in its way. A million dollar cap was fine when it was established 
in the early 1970's. But inflation has sent medical costs skyrocketing 
and forced thousands of Americans to bump up against that payment 
ceiling. As a result, some patients who desperately require medical 
attention are plowing through their savings and ending up on public 
assistance just to pay their doctor bills. Since anyone can be hit at 
any time with a disabling disease or traumatic injury--resulting from 
everything from AIDS to car accidents--this initiative will benefit a 
wide range of people.
  The legislation would amend the Employee Retirement Income Security 
Act and the Public Health Service Act to raise the lifetime cap from 
the typical exisiting limit of $1 million to $5 million in 1998 and $10 
million in 2002. It would exclude employers with fewer than 20 workers. 
Over 150 national health-related nonpartisan groups have endorsed the 
measure.
  At present, approximately one quarter of employer-sponsored health 
plans have no lifetime limit. Unfortunately, many people don't realize 
that their health insurance policies have a lifetime cap that could be 
easily exceeded if a catastrophic illness or injury occurred. If the 
industry standard of a $1 million cap were indexed for medical 
inflation since 1970, it would be worth between $10 million and $15 
million today. The American Academy of Actuaries found that raising the 
lifetime cap on large employers would likely require a premium increase 
of only $7 per year per adult to cover between $500,000 and $1 million.
  According to the accounting firm of Price Waterhouse, 1,500 people 
exhaust their lifetime payments under their private health insurance 
each year and have no choice but to impoverish themselves and their 
families to qualify for Medicaid. The firm estimates that an additional 
10,000 people will reach their lifetime

[[Page E1140]]

payment limits in the next 5 years. Lifetime caps are particularly 
devastating to those who become seriously ill, disabled, or injured at 
an early age. Some children born with certain cancers or hemophilia 
reach their lifetime cap by the time they are 10 years old.
  Raising the payment cap will not only provide more payments for 
patients, but also save money for the Federal Government. Price 
Waterhouse estimates that raising the caps would save approximately $7 
billion for the Medicaid program over 7 years because people would not 
be forced to turn to the Federal Government as the health-care provider 
of last resort.
  I urge my colleagues to support this important legislation.

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