The Affordable Care Act and Annual and Lifetime Dollar Limits
The Affordable Care Act (ObamaCare) stops insurers from setting yearly or lifetime dollar limits on essential benefits. Since 2014 health insurance companies have had to follow new rules on what benefits can be subject to dollar limits and what dollar limits can be set.
Let’s take a look at the new rules on annual and lifetime limits and how they apply to something the new law calls “essential health benefits.”Eliminating annual and lifetime dollar limits on essential health benefits means you and your family won’t have to stop essential treatment when you need it most.
What Are Dollar Limits?
Dollar limits are the amount your insurance company will pay toward a treatment after you have reached your deductible. There are two types of dollar limits, annual and lifetime, your annual and lifetime dollar limits are separate and differ from one plan to the next.
Does ObamaCare Do Away With Dollar Limits?
ObamaCare makes dollar limits illegal on essential health benefits on non-grandfathered ‘qualified’ health plans. This means your health plan may still have both annual and lifetime dollar limits on non-essential treatments, and plans that don’t have to follow the rules of the Affordable Care Act (like grandfathered plans and short-term health insurance) may still impose limits. Otherwise, ObamaCare does away with all lifetime and annual limits.
Does My Plan Still Have Dollar Limits?
All plans sold on and off the Health Insurance Marketplace, small group plans, and Government healthcare options like Medicaid and Medicare starting January 1st, 2014 or later, and any type of insurance that counts as minimum essential coverage, will offer at least ten Essential Benefits regardless of cost and no dollar limits on those essential benefits.
ACA-compliant plans have to follow all of ObamaCare’s new rules and regulations, however some types of insurance, like some grandfathered plans, short-term health insurance, and certain types of supplemental insurance don’t.
What Are Essential Health Benefits?
Essential Health Benefits consist of ten categories of items and services required on all individual and small group plans starting in 2014.
Starting January 1st of 2014, the following “Ten Essential Benefits” must be included under all insurance plans with no lifetime or annual dollar limits:
• Emergency services
• Laboratory services
• Maternity care
• Mental health and substance abuse treatment
• Outpatient, or ambulatory care
• Pediatric care
• Prescription drugs
• Preventive care
• Rehabilitative and rehabilitative (helping maintain daily functioning) services
• Vision and dental care for children
To get an in-depth view on essential health benefits please see our essential health benefits page.
ObamaCare Annual Dollar Limits
Starting in 2014 insurance companies can’t set annual dollar limits on essential health benefits. From around the time the law had been signed until 2014 insurance companies had to limit yearly dollar amounts each year leading up to doing away with annual dollar limits. It worked like this:
• $750,000: for a plan year or policy year starting on or after September 23, 2010 but before September 23, 2011.
• $1.25 million: for a plan year or policy year starting on or after September 23, 2011 but before September 23, 2012.
• $2 million: for a plan year or policy year starting on or after September 23, 2012 but before January 1, 2014.
• No limits: For all qualifying health plans sold after January 1, 2014.
ObamaCare Lifetime Dollar Limits
Since shortly after the Affordable Care Act (ACA) was signed into law insurers have been unable to set lifetime dollar limits on essential health benefits on all new plans. Remember grandfathered plans and other plans that don’t have to comply with the ACA’s rules can still have limits.