- Insurers will lose their grandfathered status if they cancel coverage when a person becomes ill or impose lifetime limits on benefits.
- Insurers will lose their grandfathered status if they eliminate all benefits for a particular condition or if it increases deductibles or co-payments by more than the rate of medical inflation plus 15 percentage points.
- Insurers will lose their grandfathered status if an employer reduces its contribution so that its share of the total cost of coverage declines by more than 5 percentage points.
- Insurers will lose their grandfathered status if they increase co-payments for doctor’s visits to $45, from $30 — a 50 percent increase — while medical inflation was 8 percent.
- Insurers will lose their grandfathered status if they reduce the cap for covered services each year.
Insurers and self insured employers make policy adjustments all the time and over the last few years they’ve been slowly shifting the risks and costs of coverage to the individual. The grandfather regulations don’t really prevent these shifts as much as they discourage employers and insurers from stiffing beneficiaries with very high costs and insufficient benefits and shield consumers from drastic benefit cuts or cost shifts. In other words, they help you like what you have, but not necessarily keep exactly the plan you have. In fact, HHS estimates that a good percentage of small business plans and policies in the individual market will lose their grandfather status and look for cheaper coverage that already meets the new requirements. In this way, the grandfather regulations also serve as a bridge to gradually moving everyone into plans that have the kind of consumer protections that Americans say they want. By 2014 almost all plans will be in full compliance.
Republicans have long claimed that this violates President Obama’s pledge of ‘if you like what you have you can keep it‘ and tomorrow Sen. Mike Enzi (R-WY) plans to offer a privileges resolution that will try to strike the grandfather regs. It would only require a majority vote:
The Enzi resolution targets the agency’s “grandfathering” rule, which allows plans that existed before March 23, 2010 — the date the healthcare law was signed — to be exempt from certain consumer protections enacted in the law, as long as plans do not significantly reduce benefits or raise consumer costs. HHS estimated that approximately 40 percent to 70 percent of all employer-provided plans will maintain “grandfather” status through 2013.
Enzi argues the provision breaks President Obama’s frequent promise that Americans could keep their health insurance if they liked it.
“An estimated 80 percent of small businesses are expected to lose their grandfathered status based upon the regulations the Administration wrote,” Enzi said in a statement. “That means the small firms that do offer health insurance won’t be able to afford what they now provide.”
The amendment is more about message than substance. Republicans aides are telling Congressional Quarterly that they expect Majority Leader Harry Reid to successfully table the resolution and it will certainly fail if it moves forward. The GOP is using this as yet another opportunity to chip away at reform and rather than proposing its own grandfather standards, the party would allow any existing plan to avoid the new consumer protections, no matter how dramatically they cut benefits, raise co-pays, or lower employer contributions. Sadly, they’d be cutting off the very regulations that will help bring about the popular consumer protections they proclaim to support.