A New York insured's major medical policy has already paid a substantial amount toward her cancer treatment this year. The insurer notifies her that it will stop paying essential health benefit claims for the remainder of the year because the policy's annual maximum has been exhausted. Under the Affordable Care Act, the insurer's action is
Select an option to reveal the answer and the full 3-part explanation — free, no signup.
Answer & full 3-part explanation (select an option above, or peek)
Why D is correct
Under the Affordable Care Act, health plans may not impose annual dollar limits on essential health benefits either: annual dollar maximums on essential health benefits were eliminated along with lifetime caps. Once the insured's treatment qualifies as an essential health benefit, the insurer must continue paying covered claims regardless of how much has already been paid, and a disclosed annual dollar maximum on such benefits is unenforceable. The New York State Department of Financial Services would treat continued reliance on such a limit by a New York insurer as an improper claims practice.
Why the other options are wrong
- A) Disclosure in the contract cannot cure what the Affordable Care Act prohibits; an annual dollar limit on essential health benefits is invalid even if plainly disclosed.
- B) No advance approval from the Superintendent of Financial Services can legitimize an annual dollar limit on essential health benefits; the prohibition is absolute.
- C) The annual-limit prohibition applies to both individual and group health plans; it does not turn on the market in which the policy was sold.
Memory hook
Annual or lifetime, dollar caps on essential health benefits do not survive the ACA.