HOW HEALTH REFORM WILL IMPACT EXISTING PLANS
June 28, 2010
"If you like your health care plan, you will be able to keep your health care plan." Throughout the long health care reform debate, that promise from President Obama was one of the few constants, made to reassure the bulk of Americans who already have insurance that the sweeping legislation would not have a downside. Just last week, Obama tried to counter critics who say the new law contains a slew of unintended consequences. Announcing a fresh set of new insurance rules, he called the regulations "a true patients' bill of rights" and insisted that they are "not punitive."
But now that regulations about existing employer-sponsored plans have been issued, it's becoming clear that many of the 160 million Americans with job-based coverage will not, in fact, be able to keep what they currently have, says Time Magazine:
- Republican critics of the Patient Protection and Affordable Care Act point to the Obama administration's own estimates that by 2013, 39 percent to 69 percent of employer plans will be subject to new regulations and not grandfathered in, or exempted from the new rules.
- House Minority Leader John Boehner issued a press release about the new regulations with the headline, "New ObamaCare Tagline Should Be 'If You Like Your Health Care Plan, Too Bad.' "
That partisan rhetoric may be heated, but it's not off base, says Time:
- The truth is that employer-based plans, which many assumed would easily be categorized as grandfathered, will be subject to the full regulatory thrust of the new law if they are altered in ways that are standard practice in the industry.
- Plans that increase the percentage of costs patients must pay out of pocket -- known as co-insurance -- lose their grandfathered status.
- The same is true for plans that significantly decrease the percentage that employers contribute to premiums or those that significantly increase deductibles or co-payments.
- An employer that switches health insurance providers also loses its grandfathered status.
Republican critics, including Boehner, have focused much of their ire toward the new grandfathering provisions on behalf of small businesses, insisting that these companies will be forced to drop coverage if they're required to meet new regulatory standards.
Source: Kate Pickert, "How Health Reform Will Impact Existing Plans," Time, June 24, 2010.
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