The Obamacare provision that saved thousands from bankruptcy

Timmy Morrison was delivered by emergency C-section, weighing in at 3 pounds, 9 ounces. Doctors put him under anesthesia within a week and into surgery within a month. Some of the contents of his stomach sometimes made their way to his lungs. Workers in the intensive care unit frequently needed to resuscitate him.

He arrived seven weeks premature — but, in a way, just at the right time.

(Courtesy of the Morrison family)

Six months before Timmy was born, President Barack Obama signed a sweeping health care law that would come to bear his name. Six days before Timmy’s birth, the Obama administration began to phase in a provision that banned insurance companies from limiting how much they would pay for any individual’s medical bills over his or her lifetime. At the time the Affordable Care Act passed, 91 million Americans had employer-sponsored plans that imposed those so-called lifetime limits.

That group included Timmy’s parents, whose plan previously included a $1 million lifetime limit. This Obamacare provision took effect September 23, 2010. Timmy was born September 29. On December 17, he surpassed $1 million worth of bills in the neonatal intensive care unit. He didn’t leave the NICU until he was 6 months old.

If Timmy had been born a week earlier, his medical benefits could have run out while he was still in the NICU. But that didn’t happen. His insurer covered everything. The NICU bills his parents save total just over $2 million (they come out to $2,070,146.94, to be exact).

“He would have lost his insurance at a million dollars,” his mom, Michelle Morrison, estimates, “which would have been about [halfway through] the NICU stay.”

Timmy still has significant and expensive medical needs. His rare genetic disease, called Opitz G/BBB Syndrome, causes abnormalities along the body’s midline. He is now 6 years old and has been under anesthesia 45 times. It happens so much, he and his mom have a routine: They sing the alphabet until he falls asleep.

Timmy breathes through a tracheostomy tube. A nurse accompanies him to school. But he’s still, in most ways, just a normal kindergartner. He climbs off his school bus wearing a backpack covered in cartoon dogs. He rides around his suburban Maryland neighborhood on a bright orange scooter with his little sister, Ivy, until they’re out of breath. He is obsessed with his collection of toy cars, which he zooms around the coffee table after school. He cannot decide whether he likes robots or pirates best.

(Johnny Harris/Vox)

Timmy’s parents switched insurance plans (and jobs) when Timmy was 8 months old and out of the NICU. On that new plan, he has run up $985,147.19 in medical bills. He will likely hit $1 million in the next few months.

Right now that doesn’t really matter. But if Republicans roll back this provision of the law — as some replacement plans do and some lobbyists are urging — it could drop a threat of bankruptcy onto Timmy’s family.

Timmy could find himself above the cap the moment the new law passed. Or he might have his old costs grandfathered in and the counting start anew. It would all “depend on the language of the statute that Congress passes,” says Nicholas Bagley, a health law expert at the University of Michigan. “I don't think there's any guarantee for the family of the 6-year-old boy. There's just a lot of uncertainty.”

The Affordable Care Act is brimming with provisions like these: small parts of the law that are hugely consequential for the people who rely on them. These provisions complicate the matter of repeal and replace, because they all have constituencies that will show up for a lobbying battle in Washington — and their stories could tug at the heartstrings of voters who otherwise support the repeal effort.

The lifetime limits ban is a few paragraphs of a 1,300-page law. It isn’t crucial to making the coverage expansion work in the way that, for example, the individual mandate or insurance subsidies are. But the ban is absolutely crucial to making the Morrisons’ lives work.

(Johnny Harris/Vox)

“We don’t really know what to do right now,” Michelle Morrison says. “Should we start pressuring his doctors to do a surgery now so he can get it in time? That doesn’t feel right. Insurance is supposed to cover things that you can’t anticipate — and for us, this is one of them.”

“I didn’t know that a good many health plans had limits”

Banning lifetime limits wasn’t a top priority when lawmakers began pursuing health reform in 2009. The final law only included the measure thanks to the efforts of one especially persistent mother, who was willing to trail a senator around North Dakota.

For decades, lifetime limits were a mainstay of the American health insurance system. In 2009, 55 percent of Americans with employer-sponsored coverage were enrolled in health plans that capped medical benefits.

About 20 percent of employer-sponsored plans capped benefits at $1 million, according to data from the Kaiser Family Foundation. An additional 32 percent were subject to limits above $2 million. At the time, PriceWaterHouseCoopers estimated there were 20,000 to 25,000 Americans who had blown past their allotted medical benefits.

These were typically people with chronic conditions that required expensive drugs, or people who suffered through traumatic medical events. The vast majority of Americans who had lifetime limits had no idea. Their medical bills would never get high enough that they’d ever need to learn.

“I didn’t know that a good many health insurance plans had limits,” says former North Dakota Sen. Byron Dorgan. “I thought if you were insured, you were insured.”

Bill Clark/CQ Roll Call

Dorgan, a Democrat spent 30 years in Congress — 18 years in the Senate and 12 in the House. But he never encountered lifetime limits until the mid-2000s, when he met one of his constituents, Brenda Neubauer.

Neubauer is a lawyer in private practice in Bismarck. Her son Jack has hemophilia, a blood disease that requires regular injections of an expensive blood clotting agent. The medication cost $30,000 each month.

Jack was in elementary school when he capped out of his dad’s (Neubauer’s ex-husband’s) health plan, which had a $1 million limit. He switched to his mom’s plan, which had a $2 million ceiling. By age 12, he was already halfway through that second policy. Neubauer estimated her son would run out of benefits in by time he turned 16.

She started to write letters to the editor and attended Sen. Dorgan’s events, where she would ask about the issue.

“We formed a relationship,” Neubauer says. “When he would come to Bismarck, he started stopping by my law office. Then I started going to Capitol Hill, and I would bring books and books full of pictures of my son, and we would just meet with anybody we could.”

Dorgan recalls Neubauer as especially effective. She persisted in her trips, visits, and letters to a point where he felt like he had to look into the issue.

“She stood up at several meetings, and then she came back to DC with her son, who was a high school student,” he says. “She brought sample invoices of the bills they had to pay. I used to use her as an example of how to be effective at lobbying Congress. She caught my attention and made it personal.”

Dorgan became a champion of the issue. In 2007, he and Sen. Olympia Snowe (R-ME) introduced a bill that would require insurers to index their caps to inflation, which would at least force them to grow in line with prices across the rest of the economy.

When the Obamacare debate started, Dorgan decided he should try for an even bigger win: getting rid of the annual limits altogether. PriceWaterHouseCoopers analyzed the provision on behalf of the National Hemophilia Foundation, and found it would only slightly increase the costs of coverage.

After that, Dorgan doesn’t remember much of a debate. Insurers weren’t huge advocates of the policy but also had bigger issues they needed to fight in the health overhaul. Health plans picked their battles — and did not pick this one.

“I didn’t find much resistance,” Dorgan says. “Most people I talked to about it were surprised; they just didn’t realize these limits existed. We were at a point where there was interest in adding things that are protective to people against medical bankruptcy, so I pushed for this.”

On March 23, 2010, the lifetime limits ban was signed into law by President Obama as Section 2711 of the Affordable Care Act.

Marvin Joseph /The Washington Post via Getty Images

“We want it to be manageable, something that we have some hope of paying”

Two things take up the most space in Timmy’s bedroom: stuffed animals and medical supplies.

There are Angry Birds and Paw Patrol stickers all over the walls, and a big collection of critters. “This one is a bunny,” Timmy says, pointing at a fluffy green animal with a pink face. “This one can breathe fire.” He’s holding a custom-made stuffed dragon with a tiny tracheostomy tube attached to its neck. It’s the tube he wore as a baby.

There are color-coded boxes in a shelf, all denoting different medical supplies. There is a ventilator in the corner, which helps Timmy breathe at night. He started using that about a year ago, and when it first showed up, the large piece of medical equipment was daunting. Michelle put a paper nose, eyes, and a mustache on the machine and named it “Kent the Vent.”

The Morrisons did not expect to have a child with significant medical needs. Michelle and Mark had thought they were having a normal pregnancy until Michelle’s preterm labor began. They are intensely grateful that Timmy was born six days after the end of lifetime limits.

“We have friends who have kids who are just a little bit older, and they remember feeling like they had to choose between medical care and bankruptcy,” says Michelle. “We never had to do that, thankfully.”

Timmy was a fragile infant. He needed immediate assistance breathing and there were daily blood draws, EKGs, ultrasounds, and X-rays.

He was first put under anesthesia when he was about a week old. That’s when doctors discovered that he didn’t have a full wall between his trachea and esophagus. “That was the big thing, and a lot of the reason he has the trach now,” Michelle says.

Courtesy of the Morrison family

There were lots of things to worry about during Timmy’s first months of life, but medical bills weren’t something the Morrisons thought about much at all. Their insurer had eliminated lifetime limits just before Timmy’s birth. The change was so recent that their paperwork still had information about $1 million benefit caps, which (luckily) was out of date and never applied.

“I remember a few times in the NICU digging up the EOBs [explanations of benefits] and being shocked at how much it was costing,” Michelle says. “But it wasn’t like there was any choice.”

Health insurance still covers the vast majority of Timmy’s medical bills, which are plentiful. He still ends up in the emergency room a few times a year due to various complications. In the past month, for example, he had a visit to his pediatrician, two trips to specialists, and one to the ER — along with multiple deliveries of medical equipment to his house.

The insurance covers the ventilator (the one named Kent), the custom tracheostomy tubes (changed once a week), and the suction catheters to clean out the tube. The Morrisons go through one or two catheters on a good day — but dozens on a bad one.

Still, there are lots of costs associated with disease that insurance won’t cover. The family, for example, buys cotton swabs in packs of 10,000 to clean the area around the tracheostomy tube. Mark Morrison has stayed home from work since Timmy was 7 months old; his condition is serious enough that they don’t feel comfortable leaving him at a day care.

Timmy sees specialists at Cincinnati Children’s Hospital a few times each year, and those road trips add up. “Just paying the parking, that’s also a lot,” Michelle says. “There are a lot of hidden costs.”

The Morrisons put a lot of their disposable income toward those types of costs. They rent their house and don’t expect to amass a down payment anytime soon. They haven’t taken a vacation since Timmy was born.

Courtesy of the Morrison family

That’s okay, Michelle and Mark agree. They’re happy that Timmy is thriving, that they can watch him ride a scooter down the sidewalk and do the things that 6-year-olds usually do. That’s worth the sacrifice.

But what they cannot fathom is being left on their own to shoulder Timmy’s sizable medical bills, if lifetime limits came back. Since he’s left the NICU, Timmy’s bills have hovered around $200,000 per year. In the past month, from mid-January to mid-February, they totaled $5,497.12. There’s no way the Morrisons could come up with that money on their own.

“I don’t want to come off as saying that we expect someone else to swoop in and pay for everything,” Michelle says, “but we want it to be manageable, something that we have some hope of paying.”

“I don't think there's any guarantee for the family of the 6-year-old boy. There's just a lot of uncertainty.”

To the Morrisons, the lifetime limit is the entire health care debate. To legislators, it is one among hundreds of Affordable Care Act provisions that may or may not survive to a replacement plan.

Republican replacement bills are split about whether to allow the return of lifetime limits. House Speaker Paul Ryan’s plan expressly calls for maintaining the health care law’s ban on lifetime limits. But Health and Human Services Secretary Tom Price’s plan, written when he was a Congress member, would kill the provision.

Chip Somodevilla/Getty Images

Louisiana Sen. Bill Cassidy’s plan would ban lifetime limits in most plans — but would have a carve-out for “limited benefit plans” to continue the cap.

Legislators will face an intense lobbying battle over where they should ultimately land. On one side are insurance executives like J. Marshall Dye. He runs Insurance Applications Group, which provides coverage to 2.5 million workers in low-wage industries like hotels and restaurants.

He argues that the ban on lifetime limits is driving up premiums and deductibles because health insurers are now on the hook for more multimillion-dollar claims.

“I hear the media talking all the time, saying rates are going up and deductibles are going up, and everybody goes, ‘That is really bad,”’ Dye says. “Nobody asks why are they going up.”

It is true that deductibles have increased significantly in employer-sponsored plans in recent years, and that some insurers report an uptick in especially large claims. But there is no evidence suggesting that these big claims have caused deductibles to rise.

Others who work in the same industry are more sanguine about the effects. “I was really concerned in the group market that we’d get some big claims, but it didn’t turn out to be a big deal,” says Robert Reiff, president of Lockton Benefit Group, the country’s largest privately-held insurance brokerage firm.

Dye plans to come to Washington next month to lobby in favor of lifetime limits. He’ll target the delegation from South Carolina, his home state.

Dye believes lifetime limits will allow insurers to offer more affordable plans, which would appeal to the low-income workers who typically use his company’s plans. He understands there will be trade-offs for families like the Morrisons, but, he says, that’s true with any policy debate.

“You cannot design something that is going to solve every individual’s problem or situation,” he said when asked about what would happen to those who especially intense medical needs. “It can’t be unlimited or else you will have a tragic circumstance; a child will circuit the math for everyone else that is trying to operate within actuarial parameters.”

For the Morrisons, this sounds totally backward: A plan without a lifetime limit is the only kind that will work for their family. What’s the point of health insurance, Michelle argues, if it can’t protect against catastrophe?

Timmy’s medical condition is unpredictable. Doctors initially said his tracheostomy tube would be out by time he turned 2, but it’s still there. He has a liver condition they don’t really understand at this point. He only began talking two years ago (before that, he relied on sign language) — and that was a surprise.

Courtesy of the Morrison family.

Still, the Morrisons have managed to developed routines around his medical care. Every night around 8 o’clock, Timmy changes into his pajamas and picks a book to read while his parents clean his tracheostomy tube. He reads about pirate dinosaurs as his dad, Mark, uses cotton swabs to clean the area around the tube that protrudes from his neck.

Once every week, Timmy’s parents need to change his tracheostomy tube. They do this before bedtime too. The little boy lies across his mom’s lap, gasping for air and coughing as his parents quickly swap in a clean breathing tube. He starts throwing up immediately after the new tube is inserted.

The process looks painful and scary, but it’s made easier by two things. For Timmy, there’s the promise of extra TV afterward. For his parents, there’s the knowledge that, for now at least, the insurance company will keep footing the bill.

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