Benjamin French was born with his right arm missing below the elbow. In his 12 years, he has been fitted with seven prostheses. His most recent replacement will cost nearly $30,000 and his doctor says he will soon grow out of it.
But, according to his insurance company, the boy is ineligible for further coverage of prosthetic devices because he has already spent his lifetime maximum benefit.
Benjamin's family happens to live in Michigan, one of 33 states where insurance companies are allowed to set annual and lifetime caps on prosthetic coverage. The family's policy with Blue Cross Blue Shield of Michigan covers a maximum of $30,000 per lifetime for prosthetics, plus $1,000 per year for repairs. In states such as Colorado and Maryland, the law says there can be no such cap on prosthetics.
"It seems really unfair," said Benjamin's mother, Kristen French. "The insurance company can do this in one state, but not in another? It's ridiculous."
The French family represents one small part of a health care system rife with inequities and inconsistencies: Some people have insurance, some do not. [Clarification Nov. 17, 2009: Original language implied Blue Cross Blue Shield of Michigan is a for-profit insurer; it is nonprofit.] For those who are insured, individual policies operate under different rules than group policies. Each insurance company and every individual policy has different requirements, exclusions, and benefits.
And, as in the case of Benjamin French -- people with nearly identical health problems may have vastly different experiences with their private health insurance companies depending on their state of residence. Another example of the inequity: If Benjamin's family were poor enough to qualify for Medicaid, most if not all of the cost of his new arm would be covered.
The French's case emerged from the Huffington Post Investigative Fund's citizen journalism project, which is calling on readers to help provide information, data and anecdotes about the inner workings of the insurance industry. One common theme among the responses is the wide variation in state rules.
States hold the primary regulatory authority over health insurance and each has different laws governing which benefits must be offered to its residents. Some of the state rules deal with major health issues and sometimes - as happened with treatment for mental illness - they have prompted insurers to expand coverage nationwide. Some states have adopted mandates for more specialized coverage, including the removal of birthmarks and varicose veins. Arkansas, Georgia and Vermont even require insurers to pay for personal trainers for people who need to lose weight for health reasons.
When a state lacks a mandate for a specific benefit, that doesn't necessarily mean insurance companies won't cover it anyway. For example, a handful of states do not require insurers to provide coverage for chemotherapy or treatment for Alzheimer's disease - though that coverage is common in many insurance plans. Fourteen states do not require insurers to cover prostate cancer screening, though many plans may offer the benefit anyway.
Prosthetics is one area where the lack of a mandate seems to cause problems for many patients.
Within this decade, 17 states have passed laws requiring that insurers pay for prosthetics on par with federal programs such as Medicaid, but in the other 33 states, insurers do not have to offer coverage for prosthetic devices and also can set annual or lifetime caps on coverage. These caps on prosthetics are similar to the caps on mental health coverage that were recently made illegal by a federal mental-health parity law, scheduled to go into effect in January.
"These rules are illogical and arbitrary," said Kimberly Hoyt, a specialist in Denver, Colo., who designs and fits prosthetic limbs. "You have to be an investigative reporter to figure out which states have parity laws and which states don't." Since Colorado became the first state to pass prosthetic parity legislation in 2001, Hoyt said, she has seen fewer denials overall for prosthetic limbs, but gets frustrated when she sees patients, such as college students, who cannot get coverage because they are insured in states with looser rules.
According to a Web survey conducted by the Amputee Coalition of America, amputees reported a wide variety of caps placed on their personal prosthetic coverage. Some said their insurance would pay no more than $1,000 per year. Some reported lifetime limits as low as $7,000. Many said their insurance would cover the cost of one prosthesis per lifetime, with no coverage for replacements or repairs. By comparison, Benjamin French's lifetime cap of $30,000 seems generous.
But French said her son's new arm will cost more than half of the family's combined income. The couple has four children. Her husband, William French, was laid off from his job at DHL delivery in February. He just started a new job with a salary of about $30,000. Kristen French works part-time at Sam's Club, where she expects to make about $12,000. The family has long had health insurance through their union affiliation.
Having to change her son's prosthetic is like "buying a brand new car every two years," French said.
A spokesman for Blue Cross Blue Shield of Michigan said the insurance company could not comment on individual cases.
Health care legislation pending in Congress could lead to some increased national consistency in insurance plans, but none of the bills would remove the right of states to require different types of coverage.
Insurance companies generally oppose state mandates, saying such rules complicate policies rather than help consumers. "I'm not going to talk about any one mandate specifically. There are already too many on the books," said Susan Pisano, spokeswoman for the health insurance industry's largest trade group, America's Health Insurance Plans. "Too often the responsibility for this issue is laid at the doorstep of the insurance companies, when it needs to be shared with consumers, employers, and health care providers."
Others say the mandates force insurers to offer more comprehensive coverage. "Insurers try to argue that some of these mandates are absurd, but I think it's telling that there are some states that don't offer, for example, maternity coverage," said Edwin Park, a health insurance analyst at the Center for Budget and Policy Priorities, which focuses on programs and policy that affect low and moderate-income families. "It depends on the state, but it can be a crapshoot."
Both the health care reform bills in the House and Senate have provisions that would push the states toward more uniform insurance laws, but health care would still remain patchwork from state-to-state. Both bills would identify at the federal level a minimum amount of essential benefits, but states could legislate stronger mandate laws.
The Senate Finance Committee's health care bill would also enable insurers to put together nationwide plans. These plans would only have to include benefits mandated by a majority of the states. However, states could decline to offer these plans to their residents if they felt they were inadequate.
But some argue that adding a layer of federal regulations will not make the insurance laws seem any less arbitrary.
"These mandates tend to depend on which political constituency is the most organized and vocal. Some people suggest that federal mandates might be more rational than they are from state to state, but I'd argue that you'd find the same problems or worse problems at the federal level," said Joel Ario, Pennsylvania's insurance commissioner and an official at the National Association of Insurance Commissioners.
Ario said that the federal government could play a role in creating minimum standards, but that the states should have the ability to mandate stronger coverage. "We've seen how this has worked in the past with environmental laws, with civil rights laws," he said.