Under the ACA, which statement about annual and lifetime dollar limits is correct?
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Answer & full 3-part explanation (select an option above, or peek)
Why A is correct
The ACA prohibits non-grandfathered group and individual plans from imposing lifetime dollar limits on essential health benefits, and it phases out and then bans annual dollar limits on those benefits as well. A lifetime limit is a cap on the total amount a plan will pay over the insured's lifetime, and an annual limit caps the amount payable in a single plan year; both undermine the protection the policy is supposed to provide. The ban ensures that coverage for serious illnesses is not exhausted mid-treatment. Grandfathered plans receive limited transition relief, but the general rule is that dollar limits on essential benefits are prohibited.
Why the other options are wrong
- B) Lifetime limits on essential health benefits are banned by the ACA; a $1 million cap would be unlawful for a non-grandfathered plan.
- C) Annual dollar limits are also prohibited on essential health benefits, regardless of whether a deductible applies.
- D) The dollar limit prohibitions apply to both group and individual plans, not only to individual coverage.
Memory hook
No dollar ceiling on essential care: a lifetime cap is the ACA casualty that never comes back.