Chelsey Tucker graduated with a Bachelor of History degree from Metropolitan State University in 2019. She now writes about insurance with her specialty being life insurance and has been quoted on Help Smart Phone and MEL Magazine.

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Dan Walker graduated with a BS in Administrative Management in 2005 and has been working in his family’s insurance agency, FCI Agency, for 15 years. He is licensed as an agent to write property and casualty insurance, including home, auto, umbrella, and dwelling fire insurance. He’s also been featured on sites like Reviews.com.

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Reviewed by Daniel Walker
Licensed Auto Insurance Agent

UPDATED: Mar 19, 2020

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The lowdown...

  • Essentially, a lifetime maximum refers to the limit that your health insurance provider will obligate itself to pay out for your medical expenses during your lifetime
  • The expenses that apply to a lifetime maximum for those that are considered to be non-essential health care related services
  • Essential services are not covered by the lifetime maximum benefit thanks to recent provisions contained under Obamacare
  • While some dental and long-term care insurance providers use lifetime maximum benefits, this policy is typically associated with health insurance companies

It used to be that health insurance providers could lump together all incurred medical expenses in arriving at the lifetime maximum benefit that they would pay out to an insured person. Once that limit was reached, the company would no longer be obligated to cover any medical expenses.

The Affordable Care Act has changed this policy. No longer are covered essential and covered based health care related services applied to lifetime maximum benefits. This means that health insurance providers will still need to provide those benefits to insured individuals, regardless of whether or not their lifetime maximum policy amount has been reached.

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Essential Health Benefits Explained

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When you set out to compare health insurance policies, it is important to know whether or not a lifetime maximum benefit is attached. If so, know what that amount is and make sure that you feel comfortable with it. This is because it will be the maximum amount that you can receive in benefits for the rest of your life, not just by the year. That being said, know that the

That being said, know that the following essential health benefits will always be provided to you as long as the Affordable Care Act remains in effect:

  • All ambulatory and emergency medical services
  • Most pediatric services. This includes oral and vision care for children under 18 years of age.
  • Many services aimed at prevention and wellness, included management for chronic diseases
  • Hospitalizations
  • Basic laboratory services
  • Services for mental health and substance abuse disorders
  • Rehabilitative devices and services

The above services, in addition to some others, have been exempt from any lifetime maximum benefit provision since September 23, 2010. Health insurers are also no longer permitted to impose any type of yearly maximum on these essential health services under provisions contained

Health insurers are also no longer permitted to impose any type of yearly maximum on these essential health services under provisions contained in the Affordable Care Act. This has the benefit of permitting individuals to receive wellness and preventative care without worry about it impacting their overall lifetime maximum benefit amount.

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Types of Coverage that Contains Lifetime Maximum Benefit Amounts

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It is important to note that some health insurance policies have dental and vision coverage built into them. If that is the case for you, those benefits may not only have yearly maximums attached, they will also apply towards your lifetime maximum benefit should your policy have one.

While it is true that oral and vision care is considered to be an essential health benefit for children under 18 years of age, that is not the case for adults.

State Policies and Lifetime Maximum Benefits

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There is no state in America that is exempt from allowing essential health care services to be counted against a lifetime maximum benefit. This has been the law of the land since 2010. For non-essential health care services, however, the policies and regulations related to lifetime maximum benefits could differ.

Individual health insurance plans, both in and out of the government marketplace and affiliated exchanges, can differ widely in terms of lifetime maximum benefits as well.

This is why it is best to do a thorough comparison of policies before deciding which one is best for you. Remember that you are always permitted to change policies during the next open enrollment period.

While it is true that a plan with a higher monthly premium may provide many more benefits to the insured, this may be offset with both yearly and maximum payment levels. That is something you will want to consider.

In addition, a policy with a lower lifetime maximum benefit applied to non-essential services could actually end up costing you more if you exceed that annual or lifetime level at some point.

Should you worry about lifetime maximum benefits?

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It is always helpful to be familiar with all of the terms and conditions associated with your chosen health insurance policy and provider. If your policy contains either a yearly or lifetime maximum benefit, there is a cause for some concern.

Even if you are healthy today, it bears mentioning that you could reach the lifetime maximum if a serious illness or ailment were to strike at some point down the line.

At the same time, the Affordable Care Act does lessen this worry to some extent, as essential healthcare services can no longer be applied to the lifetime maximum benefit provision. This means that you are free to engage in wellness and preventative services to your hearts content free from worrying that the expense will bring you close to reaching that maximum level.

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Recap

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Remember that there is a difference between an annual maximum benefit and one that is lifetime. Annual maximum benefit levels will reset each year, so even if you reach them this year, next year will see those same benefits being paid out once again.

At the same time, a policy with a lifetime maximum benefit will accumulate non-essential health care related services that have been paid out during your lifetime.

Once you reach a certain amount, there will be no benefits except for those covered as an essential health care service under the Affordable Care Act.

If you have doubts or worries that your existing maximum benefits are set too low, use the next open enrollment period to do an in-depth comparison of policies available in your state. You might find one that is more in line with your personal and family needs.

Just make sure that you are adequately covered, that you are comfortable with any deductibles and co-insurance in the policy that you choose, and that you understand what your annual and lifetime maximum benefits are.

Enter your zip code below to compare health insurance policies from your state’s top providers for FREE!

References:

  1. https://www.thebalance.com/lifetime-maximum-2645768
  2. http://health.usnews.com/health-news/health-insurance/articles/2014/11/14/health-insurance-definitions-what-the-terms-mean
  3. https://www.healthcare.gov/health-care-law-protections/lifetime-and-yearly-limits/