WASHINGTON – Consumers could be spared having to pay huge medical bills under Democratic health care legislation that's moving through Congress, as lawmakers agree on the need to put limits on how much people would pay out of their own pockets.

"There will be a cap on annual expenditures, out-of-pocket expenditures," House Majority Leader Steny Hoyer, D-Md., declared this week.

Bills pending before the House and the Senate would set different limits, but virtually everyone agrees on a key principle: "You shouldn't go bankrupt" because of your medical costs, said Elizabeth Carpenter, a policy analyst at the New America Foundation, a center-left research center.

According to a study in the August issue of the American Journal of Medicine, increasing numbers of people are going bankrupt because of illness and medical costs. Health-related debts caused 62.1 percent of all bankruptcies in 2007, up from 46 percent six years earlier.

Dr. Steffie Woolhandler, the study's senior author, said she is skeptical that the legislation would cause the bankruptcy numbers to drop.

"Yes, the limits would be an improvement," she said, but "if you have diabetes or some other chronic condition, every year you'd still be subject to the cap over and over again."

Lawmakers and other experts say the caps are an important step. "You get a lot of security for very little cost," said Sen. Ron Wyden, D-Ore.

The House bill would cap annual out-of-pocket medical expenses at $5,000 per individual and $10,000 per family starting in 2013. New plans offered through new employers, as well as policies sold through the proposed health insurance exchange, where consumers can compare plans and prices, would be subject to limits.

Most employers offer policies with limits on out-of-pocket expenses. Under Senate proposals, existing employer plans would be exempt from the limits, but the House would require employer plans to have caps in place by 2019.

The Senate legislation would tie the annual out-of-pocket limits to those that exist under current law for health savings accounts, which will be $5,950 and $11,900 in 2010 but should increase by the time new rules would go into effect in 2013 under the proposed legislation.

Out-of-pocket expenses are expected to include co-payments for medical services and prescription drugs, deductibles and co-insurance. Once a consumer reached the limit, the plan would pay 100 percent of further expenses.

David Lightman,

McClatchy Newspapers