One outstanding declaration in President Obama’s health care reform plan is the promise people who like their current health plan will have the option to keep it. How will this work? The plan is to grandfather in policies in order to “protect the ability of individuals and businesses to keep their current plan while providing important consumer protections that give Americans – rather than insurance companies – control over their health care”, per the U.S. Department of Health and Human Services, Labor and Treasury. Also, “The new regulation also provides stability and flexibility to insurers and businesses that offer health insurance coverage as the nation transitions to a more competitive marketplace in 2014 when businesses and consumers will have more affordable choices through exchanges”*.
Grandfathered plans will be allowed to make basic routine changes, such as modest adjustments to co-payments or employer contributions, but if they make any significant changes they will lose their grandfathered status. Such items in this case are as follows:
Cannot Significantly Cut or Reduce Benefits. For example, a plan cannot decide to exclude coverage for certain health conditions
Cannot Increase Coinsurance Charges. Coinsurance is the percentage that you would pay once your deductible is met.
Cannot Significantly Raise Co payment Charges. If your plan currently requires you pay a co payment at the time of your doctor visits, grandfathered plans will not be able to increase those co pays by more than $5 or a percentage equal to medical inflation plus 15 percentage points.
Cannot Significantly Raise Deductibles. Deductibles on many plans require that the patient cover these costs before their coinsurance begins. Grandfathered plans can only increase these deductibles by a percentage equal to medical inflation plus 15 percentage points, or they will lose their status.
Cannot Significantly Lower Employer Contributions. Employers usually pay a portion of their employees’ premium for insurance which is deducted from their paychecks. Grandfathered plans cannot decrease the percent of premiums the employer pays by more than 5 percentage points.
Cannot Add or Tighten an Annual Limit on What the Insurer Pays. Many insurers put a limit the amount that they will pay for covered services each year. If they want to retain their status as grandfathered plans, these plans cannot tighten any annual dollar limit in place as of March 23, 2010.
*courtesy of HHS.gov
Tags: Coinsurance, deductibles, group health, health care reform, Universal Health Care
