NCPA - National Center for Policy Analysis


May 12, 2010

Realizing that it is difficult for employers and insurance companies to turn on a dime, legislators included a "grandfather" provision in the health care overhaul law:  existing health plans do not have to adopt all the changes required by the bill.  Now attention has turned to what qualifies as a grandfathered plan, says the Wall Street Journal. 

For example: 

  • It is unclear whether a plan that makes any changes at all, even routine ones, loses its status and is thus subject to all the rules included in the law.
  • That is important because those rules include things that directly affect consumers, such as an end to co-pays for some preventive health services and a cap on out-of-pocket costs.  

However, if grandfathering is defined broadly, a plan might be able to make some changes to its coverage yet sidestep some consumer protections.  And the plan might do so in perpetuity, since there's no automatic end date to grandfather status, says the Journal. 

Confusion seems to be reigning, with employers and insurance commissioners awaiting further interpretation of the law, says the Journal. 

Source: Katherine Hobson, "What Defines a 'Grandfathered' Health Insurance Plan?" Wall Street Journal, May 10, 2010. 

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