The ACA bans annual & lifetime benefit limits on some services

Under the Patient Protection Affordable Care Act (ACA), most health plans and insurance policies may not set lifetime or annual limits for essential health benefits. Health plans are allowed to set annual dollar limits and lifetime limits on health care services that are not considered essential health benefits.

Lifetime Limits

Lifetime limits on many services are prohibited by any health plan or insurance policy. Prior to enactment of the ACA, many plans set a lifetime limit—a dollar limit on what they would spend for covered benefits during the entire time an individual was enrolled in that plan. Patients were required to pay the cost of all care exceeding those limits.

Annual Limits

The ACA bans annual dollar limits that all job-related and individual health insurance plans can put on most covered health benefits. Before the ACA, many health plans set an annual limit on their yearly spending for covered benefits. Patients were required to pay the cost of all care exceeding those limits.

Exceptions

Health plans can put an annual dollar limit and a lifetime dollar limit on spending for health care services that are not considered essential health benefits. Grandfathered health insurance policies are not required to follow the rules on annual limits.