The Ten Million Dollar Man

By Joe Wendleberger, LL.M. candidate

On November 22, 1998, now-paralyzed actor Christopher Reeve starred in ABCís made for TV movie, Rear Window, and his astonishing comeback recently led to nominations for Golden Globe and Screen Actorís Guild awards. He has also been an activist for funding for spinal cord research and insurance reform, and on the same day his TV movie aired, Parade magazine published an interview between Reeve and James Brady in which Reeve advocated controversial federal legislation to raise health insurance caps from $1 million to $10 million.

Republican Senator James Jeffords of Vermont had proposed such a provision in an amendment to the Health Insurance Portability and Accountability Act of 1996. The amendment would have barred the imposition of a lifetime limit of less than $10 million for a group health plan serving more than 25 people. In April 1996, Congress voted to table the Jeffords Amendment, but, Reeve continues to work with Senator Jeffords and others to raise the insurance cap. The Republican Policy Committee summarized discussions surrounding the bill. These discussions noted that the current $1 million cap is not a legal requirement, but an industry standard that was developed 20 years ago and affects 70% of Americans. It is believed that $10 million today is the equivalent of $1 million twenty years ago. All agreed that the law would raise insurance premiums, and some feared that small employers might provide no insurance rather than high cost insurance.

A $10 million cap inherently suggests it is appropriate to spend $10 million on the health of one person. The science fiction television program The Six Million Dollar Man, which premiered in 1974, featured an injured astronaut who received superior artificial limbs and superior vision at a cost of $6 million. My neighbor at that time commented that no one would ever spend that much money on one person. His assessment recognized that all reimbursement programs, whether funded by government, private insurance, or private HMO, have limited money.

Some states will not spend exorbitant amounts for special procedures. James Childress, in his book Practical Reasoning in Bioethics (1997), quotes the governor of Oregon as to why Oregon limits Medicaid funding on transplants to cornea and kidney transplants: "How can we spend every nickel in support of a few people when thousands never see a doctor or eat a decent meal?" However, data show that millions are spent on single individuals. The Medicaid program often spends amounts exceeding $1 million.

The discussions surrounding the Jeffords Amendment noted that the average lifetime cost of a spinal cord or severe head trauma injury is $5 million. Price Waterhouse estimated that the increased cap would save Medicaid $7 billion over the next 7 years by shifting costs to private insurers. It is estimated that 230,000 individuals are in a position similar to that of Christopher Reeve.

A legislatively mandated $10 million cap is not the solution. The amendment in this case would apply to employers with as few as 26 employees. Where expenses are high and an insurance company spreads the costs among subscribers, the employer may find premiums out of reach. On February 21, 1999, the Houston Chronicle cited a report by professors at Baylor University which quantified an increase in uninsured citizens at 0.2 to 0.6 percent for each one percent increase in insurance premiums. While employment-based health insurance has been the standard in the United States, it is not always the best answer. The bare shift of high liability to employers and insurance companies would not guarantee that necessary care is provided.

Finally, the amendment could have unanticipated consequences based on other laws that mandate certain types of care. For example, the Mental Health Parity Act requires certain employers to apply similar caps to physical and mental disabilities. Also, insurance companies must accept certain people regardless of their health. For example, an employee with a disabled son who changes jobs is entitled to insurance with the new employer without regard to expensive treatment needed for his son. This adds an element of adverse selection to new policies; currently that risk is capped at $1 million or less.

While a mandate on insurance companies is not the answer, government action could be helpful. Many states have funds to assist victim of crimes. The funds are often created by court assessments. A similar fund could be created using assessments against activities that cause the most injuries: increased driversí licensing and registration fees; a gas tax; gun tax; ammunition tax; alcohol tax; tax on dangerous sporting events; and a surcharge for drunk driving violations. The program could establish fault-based criteria for distribution so that reckless conduct is not subsidized and to allocate limited funds. This would strike a reasonable balance by providing essential care and services to as many critically injured people as possible without drastically increasing health insurance costs and the number of uninsured.