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Medicare Eligible Insureds and Increases in the Lifetime Policy Maximum Per Insured
UPDATED: May 25, 2011
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This article presents more specific limitations and waiting period exceptions to coverage under our sample individual health insurance policy. The first one below is regarding limitations of benefits for those who are eligible for Medicare. The second one is regarding changes to the lifetime policy maximum.
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(Typical wording*): Limitations, Exclusions and Non-Waiver (cont.)
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"Usual and Customary" charges
- for a Provider (doctors, etc.) are 70% of the average prevailing charges in the same geographic region as the Provider; and
- for a Hospital, Ambulatory Surgical Center, Emergency Care Facility, Skilled Nursing Home, pharmacy or other applicable facility are the average charges made for similar services and supplies in the locality where the service or supply is furnished, taking into consideration the nature and severity of the Injury or Sickness suffered by the Insured.
A "Usual and Customary charge" shall never exceed the Medicare allowable or approved charge with respect to insureds who are Medicare eligible.
This provision limits your benefits if you either have Medicare or you are simply eligible for Medicare, whether you are enrolled in it or not.
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(Limitations, Exclusions and Non-Waiver (cont.)
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Every policy has a lifetime policy maximum, which is the total amount that the policy will pay out over all of the years you hold the policy. The above provision is referring to a $2 million limit placed on the total amount of increases that will be made to the lifetime policy maximum per insured.
Almost every year, on the anniversary of the date the policy was issued to you, the insurer automatically increases the lifetime maximum by a certain amount, depending on how much of the company's money you've spent in the previous year. They judge this by looking at whether you have received services in an amount less than, equal to or greater than either your calendar year deductible, or your separate deductible for non-participating providers. Based on this information, they have a certain formula they use to figure out by how much they will automatically increase your policy's lifetime maximum.
Here is how the formula for our sample policy works:
(1) If all the insureds on your policy have used benefits which amount to less than the calendar year deductible, or less than the separate deductible for each insured for non-participating providers, then the lifetime policy maximum per insured will be automatically increased by $250,000.
(2) If all the insureds on your policy have used benefits which amount to greater than the calendar year deductible, or greater than the separate deductible for each insured for non-participating providers, but, less than twice the amount of either of these deductibles, then the lifetime policy maximum per insured will be increased by $125,000.
(3) If all the insureds on your policy have used benefits which are equal to or greater than twice the calendar year deductible, or twice the separate deductible for each insured for non-participating providers, then the lifetime policy maximum per insured will not be increased at all.
*Wording may vary from contract to contract and from state to state.
