HACKENSACK, N.J. – In 19 years with breast cancer, Gladys Lester has had a mastectomy, breast reconstruction, and a stem-cell transplant. She has had operations to remove cancer that spread to her liver, lungs and ovaries, and chemotherapy that left her bald five separate times.

But only in March, when she was told she’d used up her health coverage, did she feel she’d been handed a “death sentence.”

She arrived at the hospital for chemotherapy that day and was told she’d hit her health plan’s $1 million lifetime maximum.

“All these years, I’ve treated my cancer as a chronic disease,” and not a terminal one, says Lester, 51, of Ramsey, N.J. “I live my life as best I can. I walk every day. I play with my kids.”

She’s not the only one whose life has hinged on a line of fine print in a health plan.

In Fort Lee, N.J., Australia Montoya, 42, defied doctors’ expectations after being diagnosed with advanced colon cancer 20 months ago. She underwent surgery, 25 rounds of chemotherapy and a second major operation. Now back at her normal weight, she says she feels good.

Except for one thing: She has no more medical coverage for her cancer. She exhausted her plan’s $150,000-per-illness limit months ago.

Her husband, Jose Montoya, spelled out the consequences when he appealed in writing to her health plan: “Failure to provide continued cancer treatment for my wife’s condition will result in DEATH.”

The appeal was denied.

Cancer patients Lester and Montoya are inspiring examples of medical progress. They’ve survived tough treatments against long odds. Lester has lived long enough to see her son, 7 months old when she was diagnosed, grow up and go to college.

Yet their cases also show the high costs of such progress – and how those costs can exhaust insurance coverage.

When charges for new cancer drugs and the latest in high-tech imaging are totted up – year after year for long-term patients – a million dollars doesn’t last long. Patients with advanced breast cancer can ring up $160,000 annually just for chemotherapy. One of Montoya’s hospital stays was billed at more than $200,000.

Meanwhile, employers who want to control insurance costs limit – or cap – coverage.

When these two trends converge, the unthinkable happens. Who would anticipate running up more than a million dollars in medical bills? Who would expect to run out of insurance?

“The whole point of insurance is to protect people against catastrophic loss,” says the American Cancer Society’s Stephen Finan. “To cut them off at $1 million is to throw them into medical hell or bankruptcy.”

A recent study found that the number of Americans with inadequate insurance coverage had risen dramatically – to 25 million people in 2007, a jump of 60 percent in four years.

On the other hand, helping people like Lester and Montoya will take more than raising the caps, says Robert Zirkelbach, a spokesman for America’s Health Insurance Plans, an insurance industry group.

“Why are some of these treatments so expensive? What can be done to control the increasing cost of care?” he says.

“Maxing out” is still rare, but “it will become more common,” says Dr. Andrew Pecora, chairman and director of Hackensack University Medical Center’s cancer center. “Wonderful new drugs” that prolong life are great news for the patient, he says. But their price tag, for society, “represents a major problem.”

He adds: “None of us ever wants to go into a patient’s room and say, ‘Your recent scan shows the tumor has completely faded away, but the chemo I’ve been giving you can’t be continued because you’ve reached your maximum.'”

Caps come in many forms: lifetime caps, annual caps, prescription caps, caps per illness. Most people don’t realize their policies are limited until they find out the hard way.

“Most medical plans impose a maximum annual or lifetime dollar limit,” according to the Employee Benefits Research Institute. Fifty-five percent of covered workers have a lifetime cap, says the institute’s Paul Fronstin.

While a third of workers have lifetime maximums set at $2 million or higher, 22 percent have caps between $1 million and $2 million. The caps are even lower for 1 percent of workers.

Gladys Lester’s lifetime maximum was $1.25 million, though her “explanation of benefits” statements didn’t reflect that. In a flurry of phone calls in the days after her chemotherapy appointment, she learned that Local 1262 of the United Food and Commercial Workers union, whose welfare fund provides her benefits, had raised the cap from $1 million in its 2001 contract negotiations with supermarket chains.

That gave her coverage for a few more rounds of weekly chemotherapy.

Hackensack University Medical Center agreed to proceed with her chemo on the day they told her she had run out of coverage, Lester said. The hospital told her it would bill her health plan and see what happened.

At an emotional three-hour meeting, she talked with the billing supervisor and her medical social worker.

“I could not stop crying,” Lester said. “All I could think about was that this was the end of the road for me: I am going to die. I worked so hard to stay ahead of this disease, all for nothing. My cancer cells need to be knocked down constantly. … I just wanted to run out of the room and scream, ‘How can you do this to me?’ ”

In tight spots like this, patients figure out ingenious ways to work the system. Lester has used Local 1262’s unlimited prescription plan to order chemotherapy drugs through her drug store. By purchasing a drug like Herceptin – a $6,499 anti-cancer medicine that costs her a $30 co-pay under her prescription benefit – she keeps the charge off her hospital bill.

She then carries the drug to the hospital to be infused through the catheter above her heart.

Harvey Whille, president of the union local that provides Lester’s coverage, says he has never heard of anyone else among 20,000 plan members reaching the lifetime max.

“We’ll make it an issue during future negotiations,” he said.

Health coverage comes with the $8.07 weekly dues paid by full-time union members.

“We consider our plan the finest plan on the Eastern Seaboard with respect to sustaining health care for our members,” he said.

Australia Montoya’s husband works behind the deli counter at King’s in Fort Lee and is a member of the Little Falls-based Local 464A of the United Food and Commercial Workers.

The benefits booklet for his plan says major-medical coverage has a “$150,000 maximum for each member and dependent per illness or injury due to the same or related causes per lifetime.”

Montoya exhausted the benefit for her colon-cancer treatment Aug. 17, according to a letter the insurer faxed to her oncologist.

At that point, she still had several rounds of biweekly chemotherapy to go.

The health plan’s board refused to cover her. “We cannot change or deviate from the guidelines of the plan,” their letter said.

Subsequently, she spent 26 days in Englewood Hospital and Medical Center, a stay billed at $209,650. The health plan paid about half of that, under its hospital benefit, which is capped at 31 days. In all, the union health plan has paid Englewood close to $200,000 for her care, according to the hospital.

Asked about the case, Local 464A president John T. Niccollai said the Montoyas should “re-appeal” because the trustees changed their policy in June. “If they were to write another letter to my attention, they will get a different result,” he said.

Caps are necessary, he said, because “a provider will take every dollar you have. I don’t care what your limits are, they’ll find a way to get that money. … I see too many union plans and company plans that are going out of business, going bankrupt, going insolvent.”

He said he knew of six people who had hit the cap in his 30 years as the local’s president.

The personal crises of these two cancer patients have already become the taxpayers’ problem.

When Montoya’s insurance claims were denied, Englewood Hospital applied for charity care on her behalf.

But that program is also in crisis.

The state program partially reimburses hospitals for the care of those who can’t pay themselves. It reimburses hospitals only – not doctors, pharmacies or the company that billed $700 each of the dozen times Montoya came home with a chemotherapy infusion pump.

So far, New Jersey charity care has paid $260,000 toward Montoya’s care at Englewood Hospital, a hospital spokeswoman said.

But this year Englewood expects a drastic cut in its charity care allocation. It is to receive just $831,510, compared with $3.5 million last year. It won’t go far: Three patients like Australia Montoya could use it up.

The cuts “force us to make very difficult decisions,” said Douglas Duchak, Englewood’s president and chief executive officer.

Montoya’s oncologist, Dr. Jill Morrison of Englewood, said she hasn’t been paid for her care since last August – “a complete write-off,” the doctor said.

Morrison hasn’t treated Montoya differently because she’s on charity care, she said. “I have to pull a lot more strings – beg the [pharmaceutical] companies, pull on peoples’ heart strings,” she said. “But I fight for what she needs.”

Like Lester, Montoya has tried to maximize the benefits she has left: She gets chemotherapy at the hospital, rather than in the doctor’s office, so the hospital can bill charity care.

Montoya recently began chemotherapy with Vectibix, used for colon cancer when others have failed. It has been found to delay the progression of the disease by about five weeks. The cost: $4,000 for each biweekly infusion.

Jose Montoya said he has paid Morrison as much as he’s able from his $900 weekly paycheck. He also is trying to pay down other medical bills, like the hospital balance of $11,000. The couple have no savings left, he said.

Gladys Lester, meanwhile, switched to Medicare on July 1. The federal insurance program for those over 65 also insures younger patients who have been receiving disability benefits for more than two years. She pays $257 a month for a Medicare supplemental policy to help with deductibles and co-pays.

Where to get help

. The American Cancer Society’s Health Insurance Assistance Service connects patients with specialists who work to address their needs. 800-ACS-2345 (800-227-2345).

. The Georgetown University Health Policy Institute has written “A Consumer Guide for Getting and Keeping Health Insurance” for each state. Get one through the Web site, healthinsuranceinfo.net

. The National Coalition for Cancer Survivorship offers a book: “What Cancer Survivors Need to Know About Health Insurance,” available online at http:///www.canceradvocacy.org/.

. The Patient Access Network Foundation assists insured patients who cannot afford the out-of-pocket costs associated with their treatment. 866-316-PANF (7263) or patientaccessnetwork.org.

. Patient Advocate Foundation’s Co-Pay Relief Program provides direct co-pay assistance for pharmaceutical products to insured patients, including those with Medicare Part D, who meet certain financial and medical criteria. 866-512-3861 or copays.org.

. Patient Services Inc. helps patients with certain chronic illnesses pay for health insurance and their share of pharmacy costs. 800-366-7741 or uneedpsi.org.

. Healthwell Foundation helps people with certain diagnoses who cannot afford their insurance copayments, premiums, or other out-of-pocket costs. 800-675-8416 or healthwellfoundation.org.

. Partnership for Prescription Assistance helps locate assistance programs from 150 pharmaceutical companies as well as states. 888-477-2669 or pparx.org.

. CancerCare offers limited financial assistance grants for people being treated for cancer to help with transportation, child care, and home care. 800-813-HOPE (4673) or cancercare.org.

. Specific disease-related organizations also provide financial assistance. These include the Leukemia & Lymphoma Society (800-955-4572 or leukemia.org), the Lymphoma Research Foundation (800-500-9976 or lymphoma.org), and the National Organization for Rare Disorders (203-744-0100 or www.rarediseases.org).